TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 238
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....llant in computing capital gain on sale of residential property no G 27 Ground floor, Kalka Ji, Delhi. 3. On the facts and circumstances of the case and in law, the learned CIT(A) erred in upholding Rs.2,06,000 as cost of acquisition instead of cost of acquisition Rs.6,70,000 claimed by the Appellant in computing long term capital gain on sale of residential property no G 27 basement, Kalka Ji, Delhi." 3. Brief facts of the case are that the assessee filed return declaring total income of Rs. 5,38,341/-, the assessee had shown income from business of Rs. 5,42,500/-, income from other sources of Rs. 1,450/- and LTCG of Rs. 29,28,945/- which was claimed as exempt income by the assessee u/s 54 of the Act. The return was processed u/s 143(1) of the Income Tax Act, 1961. The assessment proceedings have been initiated against the assessee and the claim of exemption u/s 54 of the Act has been denied by the AO in following manners:- "6.2.3. Claim of exemption u/s 54 of 1.T. Act The assessee has purchased three new properties as detailed below: S. No. Description of Property Date of Purchase Purchase Amount 1. R-209, G.K-1, (1/2 share) 02/07/2008 29,10,000/- (1/2 s....
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....se may be, the cost shall be reduced by the amount of the capital gain. 6.2.4 Determination of amount of exemption u/s 54: In view of the above discussion, it is apparent that the assessee is entitled for exemption w/s 54 in respect of a residential house property purchased against long term capital gain on sale of a long term capital asset being a residential property. In this case, the assessee has purchased three properties, the exemption u/s 54 of 1.T. Act is allowed in respect of a residential property in view of provisions of section 54 and not against all the tree properties. Keeping in view, the highest investment amount in property exemption u/s 54 of I.T. Act is allowed for Rs. 20,00,000/- in respect of the property G-66 First Floor, Kalkaji purchased on 13/08/2008. Accordingly, long term capital gain after allowing exemption of Rs. 20,00,000/- computed as under: Long Term Capital Gain on sale of property G-27, Basement, Kalkaji, New Delhi as calculated above- Rs. 22,33,769/- Less: Exemption u/s 54 as discussed above Rs. 20,00,000/- Long Term Capital Gain Rs. 2.33.7691- 4. As against the order of the AO, the assessee has preferred an appeal b....
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....s of the assessee. Thus, the lower authorities have committed no error in treating the same as 'short term capital gain' in respect of residential property G-27, Ground Floor, Kalkaji, Delhi. In view of the above, we find no merit in the ground Nos. 1 and 2 of the appeal. Accordingly, ground Nos. 1 and 2 of the appeal of the assessee are dismissed. 8. In so far as basement floor is concerned, the assessee after claiming exemption u/s 54 of the Act, the capital gain declared by the assessee was Nil. The AO controverted the computation made by the assessee and the dispute between the assessee and the AO in the computation as under:- COMPUTATION OF CAPITAL GAINS: Basement: As Per Assessee As A.O. Sale Consideration (25.07.2008) 24,75,0000 24,75,000 Indexed Cost of Acquisition 7,84,587 (As per Agreement to sell 2,41,231 (As per Power of attorney Capital Gain 16,90,413 22,33,769 Exemption u/s 54 16,90,413 20,00,000 Long Term Capital Gain Nil 2,33,769 9. After considering the various facts, the AO recomputed the long term capital gain on account of transfer of basement of Rs. 2,33,769/- instead of Rs. 16,90,413/- claimed by the assessee. Accordingl....
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....ance (No.2) Act 2014 is prospective with effect from assessment year 2015-16 and not retrospective. "15. This Court as well as Madras and Delhi High Court have interpreted the expression 'a residential house' and have held that the aforesaid expression includes plural. The ratio of the decisions rendered by coordinate bench of this court are binding on us and we respectively agree with the view taken by this court while interpreting the expression 'a residential house. Therefore, the contention of the revenue that the assessee is not entitled to benefit of exemption under Section 54(1) of the Act in the facts of the case does not deserve acceptance." 12. In the case of Tilokchand & Sons vs. ITO (2019) reported in 105 taxman.com 151 (Madras), the Hon'ble Madras High Court has held that where the assessee HUF sold its residential house and invested capital gain in purchasing more than one residential houses within stipulated time limit assessee would be entitled to benefit of exemption u/s 54 of the I.T. Act. "21. In our understanding, if the word 'a' as employed under Section 54 prior to its amendment and substitution by the words 'one' with eff....
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.... one out of the various meanings of a word, regard must always be had to the context as it is a fundamental rule that the meanings of words and expressions used in an Act must take their colour from the context in which they appear. Therefore, when the context makes the meaning of a word quite clear, it becomes unnecessary to search for and select a particular meaning out of the diverse meanings a word is capable of, according to lexicographers. Dictionaries are not dictators of statutory construction where the benignant mood of a law, and more emphatically, the definition clause furnishes a different denotation. A statute cannot always be construed with the dictionary in one hand and the statute in the other. Regard must also be had to the scheme, context and to the legislative history. Words and expressions at times have a 'technical' or a 'legal meaning' and in that case they are understood in that sense. Judicial decisions expounding the meaning of words in construing statutes in pari materia will have more weight than the meaning furnished by dictionaries. (Principles of Statutory Interpretation by Justice G.P.Singh pages 279 and 280). It is in this backgrou....