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TMI Blog2019 (7) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... ties which to some extent the present Assessee also made and even that was held entitled to deduction from Capital Gains tax liability by the authorities below. Accepting the interpretation of word a as occurring in Section 54 as made by Hon ble Madras High Court in Tilokchand Sons V/s ITO [supra] , we hold that on the facts and circumstances, the assessee would be eligible to claim deduction u/s 54 on all the four residential houses. Condonation of delay of 326 days - concern CA of a CA firm who was handling assessee s matter, left the organization without handing over the papers - HELD THAT:- Keeping in view the principle of natural justice and ratio of decision of Hon ble Apex Court in Collector, Land Acquisition Vs. Katiji, [ 1987 (2) TMI 61 - SUPREME COURT] the bench formed an opinion that the delay deserve to be condoned X X X X Extracts X X X X X X X X Extracts X X X X ..... mended the said provision with effect from 01/04/2020 to provide that in case of capital gain not exceeding ₹ 2 Crores, deduction shall be available even against investment in two residential houses in India. 2.2 Interpreting the provisions of Section 54, Hon'ble Madras High Court in recent decision titled as Tilokchand & Sons V/s ITO [105 Taxmann.Com 151 14/03/2019], applying the decisions of Hon'ble Karnataka High Court in CIT V/s D. Ananda Basappa [309 ITR 329] & CIT V/s Khoobchand M. Makhija [43 Taxmann.com 143 18/12/2013] held that if the word 'a' as employed under Section 54 prior to its amendment and substitution by the words 'one' with effect from 01/04/2015 could not include plural units of residential houses then there was no need to amend the said provisions by Finance Act No.2 of 2014 which the Legislature specifically made it clear to operate only prospectively from AY 2015-16. Once it is held that the word 'a' employed can include plural residential houses also within the meaning of Section 54 prior to its amendment, then such interpretation will not change merely because the purchase of new assets in the form of residential houses is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ateria 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 background, it is necessary to understand the meaning of the word 'a' in the context in which it is used in the said Section. 10. The words "a" or "an" and "the" are called Articles. They come before nouns. There are two Articles - a (or an) and the "a" or "an" is called the Indefinite Article, because it usually leaves indefinite the person or thing spoken of. "The" is called the Definite Article, because it normally points out some particular person or thing. The indefinite article is used before singular countable nouns. The definite article is used before singular countable nouns, plural countable nouns and uncountable nouns. The indefinite Article is used in two contexts, firstly, in its original numerical sense of one. Secondly, in the vague sense of a certain. It is also used in the sense of any, to single out an individual as the representative of a class. It is also used to make a common noun of a proper noun. 11. In the Strouds Judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 date on which the 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 aforesaid provisions. In this part of the section also, the words "a residential house" is again used. The said residential house necessarily has to include buildings or lands appurtenant thereto. It cannot be construed as one residential house. In this context, it is useful to refer- to Section 13 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations i.e. one in Delhi and other in Faridabad. 3.1 Keeping in mind the aforesaid legal position, the assessee before us is a resident individual who earned Long-Term Capital Gain of ₹ 297.16 Lacs on sale of certain inherited residential property. The assessee's share in the property was to the extent of 18.78%. The assessee claimed deduction u/s 54 on account of investment made in following 4 properties by asserting that the conditions to claim the deduction were duly fulfilled by her: - No. Particulars Amount (Rs.) 1. Flat No.A103, Oshiwara Jogeshwari Scheme Deposit 1,78,71,080 11,50,000 2. Flat No.101 Vakratunga Apartment Nerul, Navi Mumbai 37,06,080 3. Flat No.104 Vakratunga Apartment Nerul, Navi Mumbai 37,06,080 4. Flat No.1001 Vakratunga Apartment Nerul, Navi Mumbai 31,81,080 TOTAL 2,96,14,320/- The flat Nos. 2 to 3 are stated to be situated on first floor whereas flat No.4 is stated to be situated at 10th floor. However, all the 3 flats are admittedly within one boundary wall of a Society. The first flat is stated to be situated at altogether different location. 3.2 The assessee, in defence, submitted that the assessee being single pare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law, the learned C.I.T(A)erred in dismissing the appeal and thereby denying the full benefits of the provisions of section 54 of the Act." Both the representatives have advanced arguments in support of the submissions, which we have considered and deliberated on the judicial pronouncements as cited before us. Our adjudication is given in succeeding paragraphs. 6.1 We have carefully considered the factual matrix as enumerated by us the in preceding paragraphs. We are of the considered opinion that keeping in view the rules of judicial precedents, the view of Special Bench of Mumbai Tribunal in ITO V/s Sushila M.Jhaveri [supra] as well as Mumbai Tribunal in Neville J.Pereira V/s ITO [supra] stand overruled by the decision of Hon'ble High Courts of Karnataka as well as of High Court of Madras. 6.2 The facts in the case of CIT V/s Raman Kumar Suri [212 Taxman 411] are different. The perusal of the said decision would reveal that two flats were joined together before the assessee became the owner of the two flats and the Tribunal, following the decision of Special Bench in ITO V/s Sushila M.Jhaveri [supra], held that since the assessee acquired one res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay High Court, on this point, has been placed on record by any of the representative. 6.5 The decision of Hon'ble Punjab & Haryana High Court in Pawan Arya V/s CIT [supra] has already been distinguished in many of the above cited cases. Even otherwise the ratio of decision of Hon'ble Apex Court rendered in CIT Vs. Vegetable Products Ltd. [88 ITR 192] would apply wherein Hon'ble Court has held that "if two reasonable constructions of a taxing provisions are possible, that construction which favors the tax payer must be adopted." Therefore, the decisions cited in para 6.4 would take precedent over this decision. 6.6 Keeping in view the above position, accepting the interpretation of word 'a' as occurring in Section 54 as made by Hon'ble Madras High Court in Tilokchand & Sons V/s ITO [supra], we hold that on the facts and circumstances, the assessee would be eligible to claim deduction u/s 54 on all the four residential houses as tabulated by us in para 3.1. The Ld. AO is directed to recompute the income of the assessee in terms of our above order. Both the grounds stand allowed. 7. Resultantly, the appeal stands partly allowed. Order pronounced in the open court on 15th July, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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