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TMI Blog1981 (10) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... onstructed a building on the same costing Rs. 38,359. This building was used as a dwelling house till July 13, 1970, on which date it was sold for Rs. 49,000. She purchased on the same day another plot of land for a sum of Rs. 20,000 and put up a construction costing Rs. 63,000. She stayed in the said house till July 5, 1971, when she sold it for a sum of Rs. 1,00,000. In making the assessment for the year 1971-72, the ITO brought to tax as short-term capital gains a sum of Rs. 10,641, being the excess realised on the sale of the house at 31, Bhagirathi Ammal Street, sold in July, 1970. The assessee claimed that the capital gains should be computed in accordance with the provisions of s. 54 of the Act. This claim was rejected by the ITO and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of two years was correct. Section 54 of the I.T. Act, 1961, runs, to the extent relevant, as follows : " Where a Capital gain arises from the transfer of a capital asset to which the provisions of section 53 are not applicable, being buildings or lands appurtenant thereto the income of which is chargeable under the head 'Income from house property', which in the two years immediately preceding the date on which the transfer took place, was being used by the assessee or a parent of his, mainly for the purposes of his own or the parent's own residence, and the assessee has within a period of one year before or after that date purchased, or has within a period of two years after that date constructed, a house property for the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from house property ". It is not in dispute that in the present case the income from the property is liable to be taxed under the said head. The further requirement is that for two years immediately preceding the date on which the transfer took place, it must have been used by the assessee or a parent of his mainly for the purpose of his own or the parent's own residence. The assessee has to show that the house was being used by her for the purpose of her own residence two years immediately preceding the date on which the transfer took place. The transfer in the present case took place on July 13, 1970. The plot itself was purchased on September 3, 1969. The property was in the hands of the assessee only for a period of approximately ten mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned judges observed at p. 245 : " The words in the section which are important are 'two years immediately preceding the date of sale' and 'was being used'. If the words 'in the two years immediately preceding' would have stood by themselves some ambiguity would have arisen, because it is possible to say that when we speak of 'in the two years', it can be any time during the period of two years., But when the words 'in the two years immediately preceding' are coupled with the words 'was being used', it connotes in the English language the user which extends to the date of transfer and the expression in the English language is described as past continuous, a continuity which extends up to the termination date which is clearly stated as th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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