Section 54

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2011 If I sell two separate residential properties in one financial year, can I purchase two separate residential properties out of the capital gains of two sale proceeds and claim exemption u/s sec 54 separately for both.
The two properties have been sold under separate sale deeds and are distinctive from each other.
Any judgements on the issue will be appreciated.

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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11 June 2011 In Rajesh Keshav Pillai v. ITO (2011) 38 (II) ITCL 624 (Mum ‘D’-Trib)It was held to a perusal of provisions of of section 54(1) shows that capital gain arising from transfer of a long term capital asset being a residential house the income of which is chargeable under the head “income from house property” is exempt if the capita! gain is invested in a residential house in the manner prescribed In the said section. There is no restriction placed any where in the section 54 that exemption is available only in relation to sale of one residential house. Therefore, in case the assessee has sold two residential houses, being long term assets, the capital gain arising from the second residential house is, also capital gain arising from the transfer of a long term assets being a residential house. The provisions of section therefore will also be applicable to the sale of second residential house and similarly to a third residential house and so on.
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CA MANOJ GUPTA
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