INCOME TAX ACT, 1961

Section 54F

Capital gains - Deduction under section 54F - Reinvestment of capital gain in multiple properties located at different addresses -

Assessee claimed deduction under section 54F. AO denied assessee's claim on account of reinvestment of capital gain in multiple properties located at different addresses.Held: If the word 'a' as employed under section 54 prior to its amendment and substitution by the words 'one' with effect from 1-4-2015 could not include plural units of residential houses, there was no need to amend the said provisions by Finance Act (No. 2) of 2014 with effect from 1-4-2015 which the Legislature specifically made it clear to operate only prospectively from assessment year 2015-16. Once it was held that the word 'a' employed can include plural residential houses also in section 54 prior to its amendment such interpretations would not change merely because purchase of new assets in the form of residential houses was at different addresses which would depend upon the facts and circumstances of each case. Assessee reinvested in the assessment year 2008-09 in which there was no restriction that assessee should reinvest in only one residential property. Amendment restricting the reinvestment to one residential property was introduced prospectively with effective from the assessment year 2015-16. Accordingly, AO was directed to allow assessee's claim of deduction under section 54F.

Relied:CIT v. VR. Karpagam (2015) 373 ITR 127 (Mad.) : 2014 TaxPub(DT) 4009 (Mad-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

SUBSCRIBE FOR FULL CONTENT