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Capital gains

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(Querist)
18 September 2007 hi friends
an individual had purchased two residential house property 10 years back, which were adjacent to each other.He combined the properties and started using the same as a single house with common entrance, living room, etc. He had purchased them vide two separate agreements. He now sold them vide two separate sale deeds and has invested the entire proceeds in a single house property. Can he claim exemption under section 54 in respect of long term capital gain arising on sale of old two houses.
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sivasankar

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sivasankar (Expert)
18 September 2007 Hi,
Section 54F alone imposes restriction on the number of houses to held on the date of sale.But section 54 does not impose restriction on the number of houses to be owned.
Moreover as per General Clauses Act singular includes plural.
Hence as per your situation the individual can claim 54 exemption.
But the case is not free from litigation as one has to explain the AO regarding the General Clauses Act.
regards
sivasankar
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