05 October 2009
assessee sold his only house property ,devolved upon him through succession.He wishes to purchase TWO house properties out of the consideration so received . Question - CAN HE CALIM DEDUCTION U/S 54 IN RESPECT OF INVESTMENT IN BOTH THE HOUSES OR THE THE DEDUCTION U/S 54 IS LIMITED TO SINGLE HOUSE PROPETY ONLY
05 October 2009
Look at the Bombay High court case: -
K.C.Kaushik Vs. P.B.Rane,ITO (1990) 84 CTR 62(Bom).
Which reads, in case assessee has purchased more than one house within the period prescribed in section 54, it is for the assessee to claim relief against purchase of any one of the house provided the other conditions mentioned in that section is satisfied.
How does the court meet the objection that Section 54(1) talks only of a residential house and not two? The High Court brought in the General Clauses Act, 1897 to help in interpretation. Section 13 of this Act declares that whenever the singular is used for a word, it is permissible to include the plural. This is an ingenious way of interpreting words and phrases in the Act.
There have been judgments allowing exemption even for purchase of a fractional interest, taking it as sufficient compliance with the requirements of Section 54 (132 ITR 661).
Also there is a problem in Taxmann's Ready Reckoner (under sec 54) which gave exemtion for more than one house.
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