| The Tax Publishers2020 TaxPub(DT) 2592 (Karn-HC) : (2020) 427 ITR 0190 : (2020) 272 TAXMAN 0235 INCOME TAX ACT, 1961
Section 54
While interpreting the expression 'a residential house' used in section 54, it is not the intention of the legislature to convey the meaning that it refers to a single residential house. Further, an asset newly acquired after sale of original asset can also be buildings or lands appurtenant thereto, which also should be residential house, therefore, the letter 'a' in the context it is used should not be construed as meaning singular, but the expression should be read in consonance with other words viz., buildings and lands.
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Capital gains - Deduction under section 54 - Whether deduction would be available if investment being made in two residential properties -
Assessee declared long-term capital gain arising out of sale of a property. He claimed deduction under section 54 in respect of two residential properties purchased by him. AO took the view that the said deduction in respect of investment made in acquiring two residential properties was not admissible. Therefore, the claim for deduction under section 54 was restricted to acquiring one residential building and deduction was allowed in respect of higher value of investment. Held: The various High Courts already made it clear that while interpreting the expression 'a residential house' used in section 54, it is not the intention of the legislature to convey the meaning that it refers to a single residential house. Further, an asset newly acquired after sale of original asset can also be buildings or lands appurtenant thereto, which also should be residential house, therefore, the letter 'a' in the context it is used should not be construed as meaning singular, but the expression should be read in consonance with other words viz., buildings and lands. Therefore, the assessee would be entitled to deduction under section 54 in respect of both the residential properties purchased by him.
REFERRED : CIT v. Ram Kishan Dass [Civil Appeal No. 3211/2019, dt. 26-3-2019] : 2019 TaxPub(DT) 2015 (SC) M/s. Tilokchand And Sons v. ITO (2019) 413 ITR 189 (MADRAS-HC) : 2019 TaxPub(DT) 2283 (Mad-HC) B. Srinivas v. ITO [ITA NO. 1134/2008, dt. 4-7-2014] CIT v. Khoobchand M. Makhija [ITA NO.496/2007 (KARNATAKA-HC), dt. 18-12-2013] : 2014 TaxPub(DT) 1790 (Karn-HC) CIT v. Gita Duggal (2013) 357 ITR 153 (DELHI-HC) : 2013 TaxPub(DT) 0960 (Del-HC) CIT v. Jyothi K. Mehta [ITA NO.194/2010 (KARNATAIKA), dt. 5-1-2011 ] : 2011 TaxPub(DT) 0788 (Karn-HC) CIT v. KG. Rukminiamma (2011) 331 ITR 211 (KARNATAKA-HC) : 2011 TaxPub(DT) 0429 (Karn-HC)
FAVOUR : In assessee's favour
A.Y. :
IN THE KARNATAKA HIGH COURT
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