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TMI Blog2008 (4) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... a purposive meaning has to be adopted to such expression instead of going by the technical meaning assigned under various enactments or the dictionary meaning given in the dictionary. It has to be assumed that the intention of the legislature was to extend the benefit of exemption under s. 54 of the Act only when the property sold as well as the property purchased by the assessee were intended to be used as residential houses, whereas the totality of circumstances clearly indicate that they were never intended to be used as residential houses either for self-occupation or for letting of. We are, therefore, of the view that the assessee is not entitled to exemption under s. 54 of the Act on the sale value of the impugned property. Therefore, we are of the view that the property purchased as well as the property sold would not fall within the description residential house - In the result, the appeal filed by the Revenue is allowed. - Member(s) : D. MANMOHAN., B. R. BASKARAN. ORDER-D. MANMOHAN, J.M.: This appeal by the Revenue is directed against the order dt. 22nd March, 2006, passed by the CIT(A), Tirupati, and it pertains to the asst. yr. 2003-04. Exemption deni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight that the legislature had intended to encourage/promote housing activity by providing certain deductions/exemption on transfer of capital asset and such benefit cannot be extended to persons who are merely trading in open plots. The narration of the property in the Annexure as 'plot' was also highlighted to show the perception of the assessee of the property, which matches with the perception of the general public with regard to such 'open plots' with a temporary structure in a corner of the plot. 3. The AO placed emphasis on the decision of the Hon'ble Andhra Pradesh High Court, in the case of CIT vs. Zaibunnisa Begam (1985) 46 CTR (AP) 48 : (1985) 151 ITR 320 (AP), wherein the Court observed that the property sold should be a building or land appurtenant to building and if a land, which is not appurtenant to building, is sold, provisions of s. 54 will have no application. In the case of the assessee, the size of temporary structure with reference to the size of the plot clearly suggests that the property sold and purchased were not residential houses. He thus concluded that the assessee is not entitled to the benefit under s. 54 of the Act and accordingly computed the 'capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain municipal number, electricity connection etc., temporary structures were erected, which are never meant to be used as residence of the assessee and they were also not fit for letting out to others. In fact, the assessee has neither let out the property nor resided in the said asbestos roofed structures and this is the practice followed by all the plot owners in that area. One has to go by the general practice followed in that area to appreciate as to whether such structures can really be considered as residential house in common parlance and one has to bear in mind the legislative intention in granting exemption under s. 54; the intention of the legislature was to boost the growth of residential houses whereas the temporary structures built by the plot owners were never intended for use as residential houses but only to get over the other impediments on the use of the said property by virtue of municipal laws, electricity laws and bye-laws of the co-operative society. 7. In the alternative, learned Departmental Representative submitted that the assessee would be entitled to exemption on the purchase of one house and not on two houses. If the claim of the assessee that each o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property sold was a residential house bearing municipal number and in fact the assessee's servant lived in the said house. There is no restriction about the size of the house and the land appurtenant thereto. In fact, asbestos roofed houses were constructed both on the property purchased as well as the property sold and in the absence of any definition with regard to the term "house", the AO was not justified in holding that only a palatial house would satisfy the conditions prescribed in the Act. It was also contended that though the property purchased by the assessee was registered under two separate documents, both were adjacent properties purchased from the same owner under two documents and thus it has to be treated as one house. With regard to the decision of the Hon'ble Delhi High Court, the learned counsel submitted that the decision was rendered with reference to the earlier provisions of s. 54 of the Act wherein self-occupation, is a condition precedent for claiming exemption and the assessee therein admitted that he had constructed a garage and a servant quarter. In fact, the AO found that there was no occupation by any servant or tenant and thus concluded that it was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the IT Act, a purposive meaning has to be adopted to such expression instead of going by the technical meaning assigned under various enactments or the dictionary meaning given in the dictionary. It is appropriate herein to reproduce the observations of the Supreme Court, as extracted by the author-Justice G.P. Singh, in the book 'Principles of Statutory Interpretation,' Seventh Edition, at p. 94: "The words of a statute, when there is doubt about their meaning, are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view. Their meaning is found not so much in a strict grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained." As could be noticed from the marginal heading, the original intention in inserting the provisions of s. 54 of the Act and the amendments made from time to time to mitigate the unintended hardship by originally using the expression used by the "assessee or parent of his..." without changing the expression "used for residence" in the marginal heading and al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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