TaxTMI 
TaxTMI 
2018 (4) TMI 399
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....e Tax(Appeals) erred in allowing the assessee's appeal relying on the decision of the Hon'ble High Court of Karnataka in the case of Smt. K.G. Ruminiamma (2011 )331 ITR 211 when the facts of the case are distinguishable from the assessee's case. In the case of Smt. K.G Ruminiamma, the Hon'ble High Court held that the four flats in the same residential building constructed by the builder in the land sold by the assessee to him and delivered to the assessee as per agreement constitute 'a residential house'. In the assessee's case, the long term capital gains were invested in two flats which are situated in two completely different geographical locations. The learned CIT (A) failed to appreciate that the two flats at two separate locations cannot be considered as a single residential unit. The CIT (A) failed to appreciate that the facts of the case in the decision of the Hon'ble Karnataka High Court in the case of CIT vs Late Khoobchand M.Makhija [2014](223 Taxmann189) are distinguishable from the assessee's case. In the said case the Hon'ble High Court opined that it was open to the assessee to purchase a big residential house out of t....
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.... and building, the total capital gains that has arisen to the assessee was Rs. 3,66,71,787. The assessee had invested in REC bonds amounting to Rs. 50,00,000. For the balance capital gains of Rs. 3,16,71,787, the assessee had invested in two flats, one at Warriam Road, Ernakulam for Rs. 78,06,000 and the other at Layam Road for Rs. 1,02,81,000. The assessee had claimed exemption u/s 54 of the Income-tax Act for both the flat purchased by him. The balance capital gains of Rs. 1,35,84,787, was offered for taxation. The assessment was completed u/s 143(3) of the I.T.Act vide order dated 06.01.2016. In the assessment completed, the Assessing Officer restricted the claim of exemption u/s 54 of the I.T.Act to one of the residential houses. The relevant observation of the Assessing Officer in restricting the claim of exemption u/s 54 of the I.T.Act, reads as follow:- "The assessee sold his property at Anna Nagar for Rs. 5,10,00,000/- Rupees, and after indexation of cost of land and building, invested Rs. 50,00,000/- out of total capital gains of Rs. 3,66,71,787 I-in REC bonds. For the balance capital gain of Rs. 3,66,71,787/-, he has invested in 2 Flats, one at Warriarn Road Erna....
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....06,000/-." 4. Aggrieved by the order of assessment restricting the claim of exemption u/s 54 of the I.T.Act, to one of the residential unit, the assessee preferred an appeal to the first appellate authority. The CIT(A) following the judgments of the Hon'ble Karnataka High Court in the case of CIT v. Rukminiamma [(2011) 196 Taxman 897 (Kar.)] and CIT v. Late Khoobchand M.Makhija [(2014) 223 Taxman 189)], decided the issue in favour of the assessee. The relevant finding of the CIT(A) reads as follow:- "I find that the case of CIT Vs. Rukminiamma [2011] 196 Taxman 87 (Kar.) IS quite similar to the instant case. In this case of Rukminiamma, Hon'ble Karnataka High Court held as under: It was not the intention of the legislation to convey the meaning that it refers to a single residential house. If that was the intention, they would have used the word "one". In a recent judgement in the case of CIT Vs Late Khoobchand M. Makhija, Hon'ble Karnataka High Court { [2014] 223 Taxman 189 } decided as under: "In the instant case, one residential house is sold. Out of the sale consideration, it was open to the assessee to purchase a big residential house, so ....
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....hing one flat to son and one to daughter. In spite of buying two apartments, he offered balance amount of Rs. 1,35,84,787/- to tax as Capital Gains. As the facts of this case are identical to one discussed above, in my opinion, both the apartments are eligible for deduction u/s 54(1). Disallowance of Rs. 78,06,000/- is hereby deleted." 5. The Revenue being aggrieved has filed this present appeal before the Tribunal. The learned Departmental Representative submitted that the issue in question is squarely covered in favour of the Revenue by the Special Bench order of the Tribunal in the case of ITO v. Ms.Sushila M.Jhaveri [(2007) 292 ITR 1 (Mum.)]. It was submitted by the learned DR that the Special Bench of the Tribunal has considered the judicial pronouncements on the issue while deciding the issue in favour of the Revenue. 6. The learned AR, on the other hand, relied on the finding of the CIT(A). The learned AR submitted that the Hon'ble Karnataka High Court decision, which has been relied on by the CIT(A) is identical to the facts of the instant case. Therefore, it was submitted that the CIT(A)'s order is to be confirmed. 7. We have heard the rival submissions a....
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....tural meaning of the words used should be applied in construing the provisions of a statute and, therefore, the Courts should not look into the intention of the legislature. It is also equally true that where the language is ambiguous then the Courts can have recourse to the aids to the interpretation to unearth the intention of the legislature in enacting such provisions. Reference can be made to decision of the Hon'ble Supreme Court in the case of Keshavji Ravji & Co. vs. CIT (1990) 82 CTR (SC) 123: (1990) 183 ITR 1(SC). The relevant observations are quoted below : "As long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the legislature." It is, therefore, necessary to see whether there is any ambiguity about the word "a". ....
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.... the word "any" has various meanings including "one". This clearly shows that the word "any" does not always mean more than one. It may also be used to denote "one". So, both the words "a" as well as "any" are ambiguous and, therefore, the meaning of these words has to be seen with reference to the context in which these words are used. Let us, therefore, consider the scheme of the exemption under Chapter IV-E relating to the capital gains. Sec. 45 which is charging section uses the expression "transfer of a capital asset". Here the word "a" means "every" since capital gain of each capital asset has to be computed depending upon the period of holding. Exemption from the levy of capital gain tax is provided in ss. 54, 54B, 54D, 54E, 54EA, 54EB, 54F and 54H as is apparent from s. 45 itself. The relevant portion of these sections are being extracted below : "54. Subject to the provisions of sub-s. (2), where, in the case of an assessee being an individual or a (HUF), the capital gain arises from the transfer of a long-term capital asset being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head 'I....
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....rom the transfer of a long-term capital asset (before the 1st day of April, 2000) (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of the net consideration in any of the (bonds, debentures, shares of a. public company or units of any mutual fund referred to in cl. (23D) of s. 10) specified by the Board in this behalf by notification in the Official Gazette (such assets hereafter In this section referred to as the (specified securities)), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say''." "54EB. (1) Where the capital gain arises from the transfer of a long-term capital asset (before the 1st day of April, 2000) (the capital asset so transferred being hereafter in this section referred to as the original asset), and the assessee has, at any time within a period of six months after the date of such transfer invested the whole or any part of capital gains, in any of the assets specified by the Board in this behalf by notificatio....
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.... investment can be made by the assessees who are eligible for exemption under s. 54E. There is nothing to indicate that investment is restricted to any of the specified assets. Had the legislature intended to restrict investment in any one of the specified assets, it would have used the words "in any one of the specified assets" instead of "in any specified asset". This clearly shows that the word "any" has been used where the legislature intended investment in more than one asset. Similarly, in s. 54EB, the legislature has used the words "In any of the assets specified by the Board". Similar is the position in s. 54EA. Sec. 54B and s. 54D also used the word "any other land" and "any other land and building" respectively. The expression "any other land" is an expression of widest amplitude and, therefore, its meaning cannot be restricted to any one piece of land. On the other hand, the legislature has used the word "a" in ss. 54 and 54F. Had the legislature intended for investment in more than one asset, it could have easily used the words "in any residential house" in ss. 54 and 54F instead of the words "a residential house". Superfluous words are not used by the legislature. Diff....
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.... respect of either of the houses provided the other conditions are fulfilled. However, where more than one unit are purchased which are adjacent to each other and are converted into one house for the purpose of residence by having common passage, common kitchen, etc., then, it would be a case of investment in one residential house and consequently, the assessee would be entitled to exemption. 12. Coming to the facts of the present case, we find that investment was made in two flats located at different localities in Mumbai. Accordingly, the assessee was entitled to exemption in respect of investment in one house only of her choice. The AO has already allowed exemption in respect of house which permitted higher deduction. Therefore, on the basis of opinion expressed by us, we reverse the order of the learned CIT(A) on this issue and restore the order of AO. 13. The next issue relates to the disallowance of Rs. 1,51,500 being brokerage paid in computing the capital gain. The AO disallowed the claim merely on the ground that assessee failed to produce the proof of payment. The xerox copy of the brokerage bill was not considered as an evidence. On appeal, the assessee....