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TMI Blog2013 (12) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... ance with the other words "buildings and lands" and therefore, the singular "a residential house" also permits use of plural by virtue of Section 13(2) of the General Clauses Act. Therefore, we are of the view, in the facts and circumstances of this case, the acquisition of two residential houses by the assessee out of the capital gains falls within the phrase "residential house" and accordingly, the assessee is entitled to the benefit conferred under Section 54(1) of the Act. However, we make it clear that while interpreting this word, the Court or the Tribunal or the authorities have to keep in mind the facts of the particular case. When we have held "a" cannot be read as singular, it also cannot be read as multiples and so as to avoid paying tax under Section 45 of the Act. Therefore, in the facts and circumstances of this case, we answer the first substantial question of law raised in favour of the assessee and against the Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit under Section 54(2) of the Act. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals). The Appellate Authority held that the valuation of the assessee at ₹ 300/- per sq.ft. for the property, which is sold, is correct. Further, it is held that the assessee is entitled to the benefit of Section 54(1) of the Act only to the extent of investment in both the residential houses. It also granted benefit of Section 54(2) of the Act. To that extent, appeal was partly allowed. Aggrieved by the said order, the Revenue preferred an appeal to the Tribunal. 3. The Tribunal after considering the rival contentions has upheld the order passed by the Appellate Authority. It is against the said order, the Revenue is in appeal. 4. The substantial questions of law, which arise for consideration in these appeals, are as under: "1. Whether the Tribunal committed an error in holding that the assessee would be entitled to claim exemption under Section 54 of the Act in respect of two separate residential houses acquired out of the capital gains, when the Section contemplates exemption in respect of "a" house for the cur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 54(1) of the Act, if the assessee has within a period of one year before or two years after the date on which the transfer took place purchased a residential house, then, instead of the capital gain being charged to income-tax as income of the previous year in which transfer took place, the assessee would be entitled to the benefit conferred under Section 54(1) of the Act. As in this case, assessee has purchased two residential houses, he is entitled to the benefit only in respect of one residential house, which is higher in value and he is not entitled to the benefit of second residential house. 8. It is in this context, the word "a residential house" used in Section 54 (1) is to be considered. 9. The word 'a' is not defined in the Act. When a word is not defined in the Act itself, it is permissible to refer to dictionaries to find out the general sense in which that word is understood in common parlance. However, in selecting 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that, 'a' sometimes called indefinite article, used with apparent plurals of number. 13. Section 13 of the General Clauses Act, 1897 deals with gender and number. It reads as under : - "13. Gender and number.- In all Central Acts and Regulations, unless there is anything repugnant in the subject or context.- (1) words importing the masculine gender shall be taken to include females; and (2) words in the singular shall include the plural, and vice versa." 14. This Court in the case of CIT v. Smt. K.G. Rukminiamma [2011] 331 ITR 211/196 Taxman 87/[2010] 8 taxmann.com 121 (Kar.), had an occasion to consider Section 54 of the Act and had held as under: 'For a proper appreciation of the aforesaid contention, it is necessary to have a careful look at Section 54 of the Income Tax Act, which reads as under: "54. Profit on sale of property used for residence - (1) Subject to the provisions of sub-section (2), where, m the case of an assesses being an individual or a Hindu undivided family, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 54 makes it clear that, 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." As in the earlier part, the words used are buildings or lands which are plural in number and that is referred to as a residential house", the original asset. An asset newly acquired after the sale of the original asset also can be buildings or lands appurtenant thereto, which also should be "a residential house." Therefore the letter "a" in the context it is used should not be construed as meaning "singular." But, being an indefinite article, the said expression should be read in consonance with the other words "buildings and lands" and, therefore, the singular "a residential house" also permits use of plural by virtue of Section 13(2) of the General Clauses Act. This is the view which is taken by this court in the aforesaid Anand Basappa's case in I.T.A.No. 113/2004, disposed of on September 20, 2008 CIT v. D. Ananda Basappa [2009] 309 ITR 329 (Kar.)].' 15. That was the case where the assessee gave hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular case. When we have held "a" cannot be read as singular, it also cannot be read as multiples and so as to avoid paying tax under Section 45 of the Act. Therefore, in the facts and circumstances of this case, we answer the first substantial question of law raised in favour of the assessee and against the Revenue. Substantial question of law No.2: 19. The argument of the Revenue was that, once the assessee purchased the residential house, the remaining unutilized capital gain should have been offered to tax immediately thereafter. The assessee could not have waited for three years and thereafter offered it for tax and therefore, it is submitted that, interpretation placed by the authorities to the proviso to Section 54(2) of the Act is not tenable. 20. In order to appreciate this contention, we have to see what Section 54(2) of the Act says. It reads as under: "54(2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilized by him for the purchase or construction of the new asset before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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