https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=378269 https://www.taxtmi.com/caselaws?id=378269 Exemption u/s 54 denied - Profit on sale of property used for residence - investment out of long term capital gains made in one residential house only - Assessee which is a HUF, which has a special character - scope of amendment - HELD THAT:- It is only by deeming fiction of law that a HUF, is treated as a separate assessable entity by including the same in the definition of the word person under Section 2 (31) of the Act. The definition of the word Assessee under Section 2(7) of the Act means a person by whom any tax or sum of money is payable under the Act. Thus, the HUF is also a person and a separate assessable entity under the Income Tax Act, 1961. If the word a as employed under Section 54 prior to its amendment and substitution by the words one with effect from 01.04.2015 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 01.04.2015 which the Legislature specifically made it clear to operate only prospectively from A.Y.2015- 2016. The sale being of a residential house does not necessarily restrict the meaning of a to one. If the capital gains arise out of sale of plural of Captial Assets also, including the residential house, it would give rise to taxable capital gains. There is no reason to restrict the benefit of deduction upon investment in residential houses even though such units of residential houses are plural, which is not always so. The word a would normally mean one. But it can in some circumstances include within its ambit and scope plural number also. It may be two or three or even more. Once we can hold that the word a employed can include plural residential houses also in Section 54 prior to its amendment such interpretations will not change merely because the purchase of new assets in the form of residential houses is at different addresses which would depend upon the facts and circumstances of each case. So long as the same Assessee (HUF) purchased one or more residential houses out of the sale consideration for which the capital gain tax liability is in question in its own name, the same Assessee should be held entitled to the benefit of deduction under Section 54 of the Act, subject to the purchase or construction being within the stipulated time limit in respect of the plural number of residential houses also. The said provision also envisages an investment in the prescribed securities which to some extent the present Assessee also made and even that was held entitled to deduction from Capital Gains tax liability by the authorities below. The Assessee-HUF in the present case, in our opinion, complied with the conditions of Section 54 of the Act in its true letter and spirit and, therefore was entitled to the deduction under Section 54 of the Act for the entire investment in the properties and securities. Therefore, in our opinion, Judgment rendered by the Karnataka High Court in CIT Vs.D.Ananda Basappa (2008 (10) TMI 99 - KARNATAKA HIGH COURT) Khoobchand M.Makhija [2013 (12) TMI 1525 - KARNATAKA HIGH COURT] cited at bar by the learned counsel for the Assessee apply on all fours to the facts of the present case. - Decided in favour of assessee. Case-Laws Income Tax Thu, 14 Mar 2019 00:00:00 +0530