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TMI Blog2019 (4) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment brought in by Finance (No.2) Act, 2014 whereby the word "a residential house" was replaced by "one residential house", without appreciating that the Explanatory Notes to Finance. (No.2) Act, 2014 have very categorically stated that the benefit under Section 54 was always intended for investment in one residential house in India. 3. Whether on the facts in the circumstances of the case and as per law, the LcI.C1T(A) has erred in considering the ratio of the judgement laid down by Special Bench of ITAT Mumbai in the case of ITO Vs. Sushila M Jhaveri (292 ITR 1) (Mum) wherein it was stated by Hon'ble bench that if the investment is made in two independent residential houses, even located in the same complex, then, exemption cannot be allowed for investment in both the houses. 4. The appellant prays that the order of CIT(A) on the above ground be set aside and that of the Assessing officer be restored. 5. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 3. The brief facts of the case are that the assessee filed her return of income on 27.07.2013 for the A.Y. 2013-14 declaring total income to the tune of Rs. 1,26,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 127 (Mad), has clearly held that the amendment to provision of section 54F is effective from April 1, 2015, which makes it clear that benefit of section 54F will be applicable to one residential house in India. Prior to the amendment it was clear that a residential house would include multiple residential units." Similar view was held by Hon'ble TAT, Delhi in the case of Brij Bhushan Tayal vs. ACIT.Circle-19(1) (ITA No.3272/DELJ/2O14 dated 13.10.2016). In the above two cases of Hon'ble ITAT, it is held that appellant is eligible for claim uls.54 prior to the amendment for more than one residential house. In the present case, appellant had sold the property before the amendment which was effective from 01.04.2015. Respectfully following the decisions of Hon'ble ITAT, Mumbai in the case of Nilesh Pravin Vora and Yatin Pravin Vora vs. ITO (supra) and Hon'ble ITAT, Delhi in the case of Brij Bhushan Tayal vs. ACIT.Circle-19(1) (supra), appellant's claim for deduction u/s.54 in respect of two residential houses is allowed. Accordingly, AO's disallowance of Rs. 46,51,562/- relating to flat at Candolim Apartment, Bardez - Goa is deleted and ground of appeal is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estriction of making the investment in only one residential house had been made available on the statute only with effect from A.Y 2015-16, and as such cannot be extended to the years prior to that. We find that our aforesaid view is fortified by the judgment of the High Court of Karnataka in the case of Commissioner of Income tax Vs. Khoobchand M. Makhija (2014) 223 taxman 189 (Kar), wherein the High Court after deliberating at length on the issue under consideration, had observed as under: 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. 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. Dic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then, instead of the capital gain being charged to income-tax as 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, -......." 9. A reading of the aforesaid provision makes it very clear that the property sold is referred to as original asset in the section. That original asset is described as buildings or lands appurtenant thereto and being a residential house. Therefore, it is not mere "a residential house". The residential house may include buildings or lands appurtenant there to. The stress is on the use to which the property is put to. Only when that asset was used as a residential house, which may consist of buildings or lands appurtenant thereto, the income derived from the sale of such a residential house is chargeable under the head "Income from house property." If the assessee has within a period of one year before or two years after the dale on which the transfer took place purchased, or has within a period of three years after that date constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it constituted a residential house for the purpose of Section 54 and therefore, entitled to the said benefit. 16. 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 as to accommodate both his sons, in which event in terms of Section 54 (1), he would have been entitled to the benefit of the said Section. However, instead of purchasing one big house, having regard to the fact that both his sons are grown up, have families and in order to see that in future there won‟t be any litigation or disharmony, he chose to purchase two small residential houses to accommodate both his sons. 17. It is clear that the assessee was not attempting to evade tax. In fact, after purchasing two residential houses, still there remained unutilized capital gain, which he has offered for tax. Therefore, as held in the aforesaid Rukminiamma‟s case, the context in which the expression "a residential house " is used in Section 54 makes it clear that it was not the intention of the legislature to convey the meaning that it refers to a single residential house. The letter "a" in the context, which is us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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