Capital Gain exemption under section 54

Hi Sivaraja,

No, Exemption is available only for one residential Property.

Please find below the case law.

Judgment :

IN THE INCOME TAX APPELLATE TRIBUNAL
SPECIAL BENCH
"I" BENCH, MUKMBAI
BEFORE SHRI G.E. VEERABHADRAPPA, VP, SHRI K.C. SINGHAL, JM
AND DR. O.K. NARAYANAN, AM
I.T.A NO.2865/Mum/2002
Assessment Year : 1995-96
ITO, Ward-19(3)-4, R.No.304, 3rd Floor, Piramal Chambers Lalbaug, Mumbai - 400 012

Vs

Ms. Sushila M. Jhaveri, 801/802, Coste Belle, 687, Perry Cross Rd. Bandra (W), Mumbai - 400 050 PAN - J.C/S.R.9/201-A/S

Appellant

Respondent

For Revenue : Mr. Bharat Bhushan and
Mr. Aditya Vikram
For Assessee : Mr. Firoz B. Andhyarujina

It is held that exemption under sections 54 and 54F of the Act would be allowable in respect of one residential house only. If the assessee has purchased more than one residential house, then the choice would be with assessee to avail the exemption in respect of either of the houses provided the other conditions are fulfilled. However, where more than one unit are purchased which are adjacent to each other and are converted into one house for the purpose of residence by having common passage, common kitchen, etc., then, it would be a case of investment in one residential house and consequently, the assessee would be entitled to exemption.

Coming to the facts of the present case, we find that investment was made in two flats located at different localities in Mumbai. Accordingly, the assessee was entitled to exemption in respect of investment in one house only of her choice. The assessing officer has already allowed exemption in respect of house which permitted higher deduction. Therefore, on the basis of opinion expressed by us, we reverse the order of the learned CIT(A) on this issue and restore the order of assessing officer.