Packing batteries with more punch
Indian researchers are working on cells that can store more energy, last longer
BL05HOME2 - THE HINDU
Income-Tax Act, 1961 (Act) gives exemption for capital gains from tax if the conditions stipulated, inter-alia, in Section 54 of the Act are satisfied. This section provides for exemption in respect of long-term capital gains arising from the transfer of a residential house and requires investment of the amount of capital gain in acquiring another residential house for exemption from tax on capital gains. The condition attached to the benefit u/s 54(1) is that the assessee, on transfer of a residential house, purchases or constructs another residential house within the time mentioned. The use of the word ‘a' gives impression that in lieu of one house transferred, only one house can be acquired for claiming exemption. There has been controversy on the issue whether the capital gain arising on the transfer of a residential house can be invested in more than one house.
In the following decisions, the views expressed are that in lieu of one residential house transferred, only one such house can be acquired: Gulshanbanoo R. Mukhi v. Joint CIT (2002) 83 ITD 649 (Mum.Trib);
Krishna Gopal Nagpal v. Dy. CIT (2004) 82 TTJ (Pune-Trib) 48; and ITO v. Sushila M. Jhaveri (2007) 16 (II) ITCL 254 (Mum ‘I' Trib).
In the following decisions, considering the facts of the cases, more than one residential houses have been considered permissible: K.G. Vyas v. Seventh ITO (1986) 16 ITD 195 (Bom Trib.); CIT v. Sunita Aggarwal (2007) 13(1) ITCL 66 (Del-HC); ITO v. P.C. Ramkrishna (HUF) 2007 108 ITD 251 (Chen. Trib.) and Prem Prakash Bhutani v. Asstt. CIT (2007) 110 TTJ (Delhi-Trib) 440.
The Karnataka High Court has expressed a more rationale view considering the provisions of Section 54. In the case before the court, the assessee owned a property, which she agreed to give to a builder in lieu of getting 48 per cent of super-built area in the form of residential apartments. The builder constructed eight flats and gave four to the assessee. The issue arose whether capital gain tax exemption can be claimed in respect of acquisition of four flats. The Revenue's case before the court was that section 54 uses the word ‘a residential house'. Hence, exemption is available only in respect of investment in one such house – not four. The HC did not agree with the Revenue's view. According to the court, the property is sold is referred to as ‘original asset' in Section 54, described as buildings or lands appurtenant thereto, being ‘a residential house'. Thus, residential house may include buildings or land appurtenant thereto. The stress is on the use to which the property is put and exemption is available when the house acquired is used as a residential house. The residential house necessarily have to be buildings or lands appurtenant thereto. It cannot be construed as one residential house.
The HC observed that 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 as a single residential house. According to the HC, it is permissible to invest the amount of capital gain in more than one house and get exemption envisaged in Section 54.
(The author is a former chairman of CBDT)
Indian researchers are working on cells that can store more energy, last longer
To fix a broken bone, doctors often harvest another bone from the patient’s body or from someone else. It ...
Superconductors from IIScScientists at IISc Bangalore have invented a device with a nanocrystal structure ...
Engineering and construction giant L&T has won a licence from the Council of Scientific & Industrial ...
Will a stock continue its current trend or will it reverse? We tell you how you can read chart patterns to ...
Sensex and Nifty 50 saw selling interest on Friday and slumped; selling pressure could continue
Investors with a long-term horizon can consider this offer
Most AMCs have been sending out cryptic e-mails. We tell you how to read between the lines
In these isolated times when people yearn for a slice of the familiar, amateur and professional chefs are ...
With strokes of quirky humour, Partha Pratim Deb uses pulp, terracotta, glass and discarded cloth to create ...
Given the events in Washington DC on January 6, this week’s quiz is all about buildings that house or housed ...
While good writing wars against the cliché, television gives it a natural home
Digital is becoming dominant media, but are companies and their ad agencies transforming fast enough to make a ...
Slow Network, promoted by journalist-lyricist Neelesh Misra, pushes rural products and experiences
How marketers can use the traditional exchange of festive wishes meaningfully
For Fortune, a brand celebrating its 20th anniversary, it was a rude shock to become the butt of social media ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor