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54f

maheboob (student) (52 Points)

30 December 2010

If A sale a house for a consideration of rs.80,00,000/- & for saving capital gain tax Mr. A has invested in

residential house. But instead of purchasing one residential property he has purchase two residential

property at different place my question is that whether two properties is allowed in 54F for saving tax

Thanking You

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12 Replies

Sunshine (Helping All) (10575 Points)
Replied 30 December 2010

yes he can purcahse 2 different houses and claim exemption for both...

CA.Pravinchandra (Executive (F&A)) (2387 Points)
Replied 30 December 2010

As per Judgement of Karnataka High Court in the case of Basappa Angadi Vs CIT(2009), deduction u/s 54f cant be restricted to single house property. It narrated that Sec 13 of General Clauses Act, 1897 interprets plural to singular, So "Residential Property" u/s 54F doesnt means single property. So deduction can be given two properties.

Nabeel (CA) (3288 Points)
Replied 31 December 2010

yeah he can purchase both houses and claim exemption for that.......

maheboob (student) (52 Points)
Replied 31 December 2010

please give me a strong judgement where the tribunal or cit has allowed both residential property as different places for deduction u/s 54f

CA Priya (CS Final) (1049 Points)
Replied 31 December 2010

Hey buddy........... U may find this link useful...................

https://elagaan.com/node/2841?quicktabs_1=2

Happy new year.............. Cheeeeeeeers...............

SUNNY (CA Final & CS Professional) (327 Points)
Replied 31 December 2010

Yes yu can take deduction of two houses...........happy new year to all cci members

Rahul Agarwal (Future CA) (217 Points)
Replied 31 December 2010

Only 1 house benefit can be taken

Check the link

https://www.etaxindia.org/2009/02/capital-gains-exemption-us-54f-capital.html

Murali (Textile Designer) (66 Points)
Replied 31 December 2010

The Mumbai Special Bench's decision was

Exemption u/s 54 or 54F is allowable for one house only.
If assessee has purchased more than one house, choice will be with assessee to select on which house he wants to avail exemption u/s 54 or 54 F as the case may be.
If more than one unit are purchased and made into one unit for the purpose of residence, it will be considered as one house for claiming exemption u/s 54 or 54 F.
If floor is added to a new house , it remains one house , therefore exemption for both the new house and the house on added floor shall be taken together for claiming exemption u/s 54 or 54F.

Mayur Arora (CA Final) (295 Points)
Replied 31 December 2010

Yes u can take the exemptions for 2 houses.

Vivek Raju P (Manager) (614 Points)
Replied 01 January 2011

Exemption will be available for only one house as sec 54/54F (1) categorically specifies the word " Residential House " which shall mean only one unit.

The Mumbai Tribunal has held that the exemption will be allowed for only one residential house in the case of Ms. Sushila M. Jhaveri [2007] 107 itd 327

Jitender (Head of Audit & Taxation Deptt) (38 Points)
Replied 01 January 2011

No.. Source ICAI's website link: https://220.227.161.86/17856finalselect2009_caselawdigest.pdf Can exemption under section 54(1) be claimed for the purchase of more than one residential premises? CIT v. D. Ananda Basappa (2009) 309 ITR 329 (Kar.) Relevant Section: 54 The assessee a Hindu undivided family sold a residential house. The assessee purchased two residential flats adjacent to each other from taking two separate registered sale deeds in respect of the two flats situate side by side purchased on the same day. The vendor had certified that it had effected necessary modifications to the two flats to make it one residential apartment. The assessee sought exemption under section 54. The assessing authority gave exemption for capital gains to the extent of purchase of one residential flat. It was found by the Inspector that the residential flats were in the occupation of two different tenants. The Assessing Officer held that section 54(1) of the Act does not permit exemption for the purchasers for more than one residential premises. The Commissioner (Appeals) confirmed the order of the assessing authority. The Tribunal set aside the order of the Commissioner (Appeals) and held that the flats purchased by the assessee had to be treated as one single residential unit and that the assessee was entitled to full exemption. The High Court held that it was shown by the assessee that the apartments were situated side by side. The builder had also stated that he had effected modification of the flats to make them one unit by opening the door in between the two apartments. The fact that at the time when the Inspector inspected the premises, the flats were occupied by two different tenants was not a ground to hold that the apartment was not one residential unit. The fact that the assessee could have purchased both the flats in one single sale deed or could have narrated the purchase of two premises as one unit in the sale deed was not a ground to hold that the assessee had no intention to purchase two flats as one unit. The assessee was entitled to the exemption under section 54.

RAMESHWER AGARWAL (B.COM,FCA) (26 Points)
Replied 03 January 2011

hi for those who say `both house` yes,please give case specific reply Originally posted by : maheboob
	If A sale a house for a consideration of rs.80,00,000/- & for saving capital gain tax Mr. A has invested in residential house. But instead of purchasing one residential property he has purchase two residential property at different place my question is that whether two properties is allowed in 54F for saving tax Thanking You