9911796707
TMI Blog2008 (10) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... AO and C. R. KUMARASWAMY JJ. M. V. Seshachala for the appellants. M/s. K. R. Prasad for the respondent. JUDGMENT 1. The respondent-assessee is a Hindu undivided family. The assessee sold a residential house for Rs. 2,12,50,000 in the year October, 1995. The assessee purchased two residential flats adjacent to each other from M/s. Ormonde Private Developers Ltd. The assessee has, however, taken two separate registered sale deeds in respect of the two flats situate side by side purchased on the same day. The vendor has certified that he has effected necessary modifications to the two flats to make it one residential apartment. The assessee sought for exemption under section 54 of the Income-tax Act. 2. The assessing authority gave exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the provision of section 54(1) of the Income-tax Act, the relevant portion is extracted herein for convenient reference: "Subject to the provisions of sub-section (2), where, in the case of an assessee 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 of which is chargeable under the head 'Income from house property' (hereafter in this section referred to as the original asset), and 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 residentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional residential building. 7. When a Hindu undivided family's residential house is sold, the capital gain should be invested for the purchase of only one residential house is an incorrect proposition. After all, the Hindu undivided family property is held by the members as joint tenants. The members keeping in view the future needs in event of separation, purchase more than one residential building, it cannot be said that the benefit of exemption is to be denied under section 54(1) of the Income-tax Act. 8. On facts, it is shown by the assessee that the apartments are situated side by side. The builder has also stated that he has effected modification of the flats to make it as one unit by opening the door in between two apartments. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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