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TMI Blog2018 (4) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... a Poojari, AM And Shri George George K, JM For The Appellant : Sri. A.Dhanaraj, Sr. DR For The Respondent : Sri. Philip George, Advocate ORDER Per George George K., JM This appeal at the instance of the Department is directed against the order of the Commissioner of Income-tax (Appeals) dated 08.12.2016. The relevant assessment year is 2013- 2014. 2. The grounds raised by the Department reads as follow:- The order of the Commissioner of Income Tax (Appeals-II), Kochi in appeal no. ITA NO.87/NC Circle 2(1)/CIT(A)-1I/15-16 dated 08/12/2016. The learned CIT(A) erred in holding that the assessee was eligible for deduction u/s 54F without considering the fact exemption u/s 54/54F is restricted to investment in 'a residential house'. The expression 'a residential house' implies 'one residential house'. The learned Commissioner of Income 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be read as singular, it also cannot be read as multiple so as to avoid paying taxes under section 45 of the Act. ' The learned CIT (A) failed to consider that in the decisions in the cases of CIT Vs D.Ananda Basappa [2009] (309 ITR 329)(Kar. H.C), CIT Vs K.G. Rukminiamma [2011]196 Taxmann 87 (Kar) and CIT Vs Gita Duggal (2013-TIOL-TIOL-143-(HC-DEL)) all the units were either adjacent or in the same apartment complex or had some common thread for constituting a residential house . The learned CIT(A) failed to appreciate that the scope of the expression a residential house is to be restricted to one composite unit and not to multiple and independent units. 3. Briefly stated the facts of the case are as follows:- 3.1 The assessee is an individual. He had sold his residential property at Annanagar, Chennai for a sum of ₹ 5,10,00,000 on 15.11.2012. After indexation of cost of land and building, the total capital gains that has arisen to the assessee was ₹ 3,66,71,787. The assessee had invested in REC bonds amounting to ₹ 50,00,000. For the balance capital gains of ₹ 3,16,71,787, the assessee had invested in two flats, one at Warriam Road, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision is only an afterthought. In the case of High court of Delhi CIT vs Gita Duggal (2013) 30 Taxmann.com 230 (Delhi), the judicial decision that several independent houses or residential units can be considered as one residential unit does not apply to the assessee's case as assessee, has purchased two flats in two separate residential areas that cannot be considered as a single residential unit and moreover the assessee at the time of finalizing the computation of total income had computed capital gain exemption for One Flat and paid advance taxes. But at the time of filing the return of income, claimed exemption for both the flats and claimed a refund of advance tax paid which is an afterthought of judicial decisions of various High courts. Hence it is proposed to restrict assessee's claim u/s 54 for one flat with higher value ie, ₹ 1,02,81,000/- and disallow the assessee' claim for second flat at lower value ie ₹ 78,06,000/-. 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) followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 can not be read as singular, it also can not be read as multiple 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 . I find that facts of the instant case is identical to the one discussed above. In the instant case, the appellant owned a residential house in Chennai, which he disposed off in 2012 and purchased two independent apartments in Cochin as he has one son and one daughter and the wanted to give one apartment to each one of them. For this purpose he has prepared a Will bequeathing one flat to son and one to daughter. In spite of buying two apartments, he offered balance amount of ₹ 1,35,84,787/- to tax as Capital Gains. As the facts of this case are identical to one discussed above, in my opinion, bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... One at Warriam Road and the other at Layam Road. Therefore, these two flats cannot be converted to a single residential unit. 7.2 On identical facts, the Special Bench of the Tribunal, after considering the judicial pronouncements on the issue, have decided the matter against the assessee. The relevant finding of the Special Bench of the Tribunal in the case of ITO v. Ms.Sushila M.Jhaveri [(2007) 292 ITR 1 (Mumbai)] reads as follow:- 7. Rival submissions have been considered carefully. The real controversy is about the true meaning of the expression a residential house used by the legislature in ss. 54 and 54F of the Act. According to the Revenue, it means, one residential house while, according to the assessee, the word a means any which in turn means one or more than one . There cannot be dispute to the cardinal rule of interpretation that where the language used by the legislature is plain, simple and unambiguous, then the plain and natural 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 ambi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation cannot be applied and consequently, the intention of the legislature has to be discovered by resorting to the aids to the interpretation. One of the rules of interpretation is to find out the context in which such word is used by the legislature. Before coming to the context in which word a is used in s. 54/54F, we would like to mention that much emphasis was made on the word any . It has been contended that the word a means any which in turn means many or more than one . This appears to be partially true. As per various dictionary meanings, it also includes one or one out of many . According to Law Lexicon, the word any may have several meanings according to the circumstances. It may mean all , each , some or one or more out of several . It further says that it is not confined to a plural sense. According to Illustrated Oxford Dictionary as well as Webster's Encyclopaedic Unabridged Dictionary also, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding or any right in land or building, forming part of an industrial undertaking belonging to the assessee which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee for the purposes of the business of the said undertaking (hereafter in this section referred to as the original asset), and the assessee has within a period of three years after that date purchased any other land or building or any right in any other land or building or constructed any other building for the purposes of shifting or re-establishing the said undertaking or setting up another industrial undertaking, then, instead of the capital gain being charged to incometax as the income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say''' 54EA. (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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with in accordance with the following provisions of this section, that is to say''. Perusal of the above provisions clearly reveals that the legislature has used the words a and any with reference to investment of capital gain/sale consideration in certain asset or assets. The legislature was not oblivious regarding the meaning of these two words. The word any has been used by the legislature in ss. 54B, 54D, 54E, 54EA and 54EB while the word a has been used in ss. 54 and 54F of the Act. This clearly shows that the legislature intended different meanings to be given to these two words. A close reading of these sections shows that legislature intended to allow exemption in respect of investment in more than one asset by using the word any . Sec. 54E allows exemption in respect of investment in any specified asset. Expln. 1 to s. 54E defines the specified asset . It includes various assets in which 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to avail exemption in respect of any one house as held by the Hon'ble Bombay High Court in the case of K.C. Kaushik (supra). The view taken by us in this para is also justified by the decision of the Hon'ble Calcutta High Court in the case of B.B. Sarkar vs. CIT (1982) 26 CTR (Cal) 13: (1981) 132 ITR 150(Cal), wherein purchase of ground floor of a house and thereafter construction of first floor was held to be an investment in one house only. Their Lordships at p. 156 observed as under : If a floor is constructed to the new house or if it is renovated it remains a house and this will not be two houses. 11. In view of the above discussion, it is held that exemption under ss. 54 and 54F of the Act would be allowable in respect of one residential house only. If the assessee has purchased more than one residential house, then the choice would be with assessee to avail the exemption in 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments. The built up area received by the assessee was in the same project in the shape of four flats which were adjacent flats. Accordingly, the Tribunal as well as the Hon ble High Court had held that these four flats received by the assessee under the JDA in the project will constitute a residential house as per the provisions of Section 54 of the I.T.Act. 7.5 The judgment of the Hon ble Karnataka High Court in the case of CIT vs Late Khoobchand M.Makhija (supra) is distinguishable from assessee s case. The Hon ble High Court in case of CIT v. Late Khoobchand M.Makhija (supra) had decided the issue on the peculiar facts of that case. In the case considered by the Hon ble High Court, it is not discernable whether two residential units purchased are in the same locality or in two different localities. Moreover, In the case considered by the Hon ble High Court, there was compelling circumstances for having purchased two residential units, whereas in the assessee s case, no such compelling circumstances have been made out for the purchase of two flats in two different locations. The assessee at the time of computation of income for the purpose of advance tax payment, had compu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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