Karnataka High Court
The Commissioner Of Income Tax vs Jyothi K Mehta on 5 January, 2011
Bench: N.Kumar, Ravi Malimath
IN THE HIGH COURT OFMKEARESATAKA AT BANGALORE
DATED THIS THE SWDAY OF JANUARY 2€)11 '*..
PRESENT
THE HON'BLE MR. JUSTICE N.Kuw;';:i--R . ' 7§' ~
AND
THE HON'BLE MR.JusTIC'E R.év~1T' M}k'i.1'|'~4A'T
ITA No.;34 OF'---.2Q_Q *
BET\!'ui'EENx.i PM "
1. The C 0ITimEVSS"i'0.n€.FVGf 1"n_come---Ta><,
C.R..Bui¥ding_, _ "
QL,:eera--s Road-,_ ' L'
; t:">'an.ga|oreA,V
IficQme--Té§<& Officer
3 " V W"ard F 8??)
_ 'C;-R':-am §§.'d-;...r:g,
Queefijs Road,
Bafrgaibre.
.. ..,/XPPELLANTS
{ By. $raM.v.sesnac:r:a:a, Advocata)
AND:
Smt. Eyathi K.Mehta,
C/0 Insulated Congiuctors Pvt, Li:d.,
14 K.M., Tumkur Road,
Bangalore.
>E<>?<*
.--"';;;!i:i:EvS'P'(,.)!V\i*!3ii!§i4T".
This ITA fifed under s1961VV
arising out of Order date'd«._ 2_7.11.2Q0_9 pfrassed
ITA.No.664/BNG/2009.»-,, for ,':i"' ,_'Ass-e.ssment'~Year 2006-
2007, praying to i) fo,_rE'nuiE-Ate ,the"~s'u.bst,antiai questions of
law stated therein, ii) a'i_iow'e.th'e»'appea!.and set aside the
order passed' by_._._ the._ ITi«\.T"*--i.;-"Bangalore
ITA.N0.664/Bi\i:3/'2009§_, dated 27»,.i1s1,2'ot::9, and confirm the
order passed' bfg.,,,-;hg'--.AIn;_:ome_'Ta'x"Officer, Ward -~8(2),
Bangafere, " -.
This a,ppea.i1A'Ec:ming, fadmission this day,
Kumar 3., delh/&er'e_d the 'f,bHQ'v.I.i_.n'g,,: --_.
JUDGMENT
.f"'""vThig:,..épp'eai"i~is preferred by the revenue challenging theV'ér_d'er,'. Tribunai hoiciing that though the V7_'assesseef .__;;>urci2as7ej.dAitwo flats out of the income derived ««.f}fQm"t.he salépt a residentiaf premises, as she has utilized s¥e'n:e,_fE£i;r a singie residentiai unit she is net iiabie to i:i'a'*;r{:evp_i,i:ai gains tax.
:33//"
2., The assessee and her son sold thei--é5"'§§:re_pe,rty situated at No.326, Upper Palace Orchards, utilized the sale consideration for.the_ .t'woj,.fla.ts situated at i\le.903 8c 904, RMV II Stage, Bangalore. "lif:h'e,_assle'ss_eefi'ied"':.a""i'eturn of» income for the assessment "d--ec.|a.ri§ng a sum of Rs.8,60,069/--. Tie',asscggsggeli"{§i,aii.l;jwaed that she was entitled to exemption'"u'n'derVL:3.é;c.t'ioln and 54?' of. the Income Tax' 4' held that the assessee wasgavlreadyi anV_doi}vne'r of a residential flat at Bombay and ghé purrchasedw two flats out of the sale proceeds. 'i-i'e'nc7e',-.':'t~?ia;e .ae.:"s'essee is not entitled to claim exemption frdm the eapital gains In appeal, the Commissioner held that though the assessee purchased two flats, as the same A' 'yea-;<:--.*'liritehded to be utilised as a common residence, the ..._a§sseseee would be entitled to claim exemption. aggrieved by the same, revenue preferred an appeal to the tribunal, 2 5 =__/'''' which upheld the order of the Commissioner and..dis:rnl_i:ssVed the appeal. Aggrieved by the same, the appeaL _-m__
4. The material on record discloses that":th:e i*lats'g purchased by the assessee w'e'tre"'situated.si'dae-Ibirgside. The builder has also stated'~.t_hat_«"he_TriadVleffectedymodifications to the flats to make them'l-'oné"_iinVit the door inw between the.~tvJ'o'}apai=tment:s.Vifh~e* that the assessee could hiav-e.o:t;;roha§sed"b.Vo'th theiliats in one single sale deed or could purchase of two premises as one unitin Vttietsale...-"ldeed could not have made any .' dil'fe3'reD._?Ce.VV%_ This"Co2...a..rt' in the case of "The Commissioner of '.Eo'come:€":*a§<i'vi.jand another vs. Smt.K,G.Rukminiamma de;5:'dea ai?i.jr.é§'5" August .2010 in ITA No.?83/2008" deaiing with ..aiX.similar situation, held that the expression 'a V' reslidentia! house' used in Section 54 makee it clear that, it was not the intention of the legislation to convey the 'meaning that it refers to a single residential house. If that was the intention, they would have used the word "one".
i.
In the earlier part of the Section, the wordS_.'us:edi'~».;are buildings or lands which are plural in referred to as "a residential hous_ef.'., the o'rig'i"r'iafIfV.asset., An "
asset newly acquired after the s-ale,'_"of';thiie. can also be buildings or lands--iapptirtenanti'itheireto, -iavhichf' also should be "a residentialp_i§:o:use"f,_v, Thheretorefthe letter 'a' in the context he construed as meaning "siri§u~l.a'r". article, the said re-adiiiniiiconsonance with the _'u'VlVands' and therefore, the singular' fa"resid»entia!i also permits use of plural by virtue. Q? S4ectio'n"'"13x'{2.i of the General Clauses Act. In fafit,'.t5li$ the vieiriiiitaken by this Court in the earlier case ais'o," ~T'1i"herefo.re, merely because the assessee purchased ti/AV'i3._ ur§;vits,,lA.7~"it cannot be said that the assessee is not entitlecfito the benefit of Section 54, The evidence on it =i_*eeo.td aisa discloses that the two units are situated side by ....side, modification were made, the door was opened making it as a single unit and the cansideration received E at ,/ /"'4 ...6...
from the sake of the residentiai unit is utilised to purchase these residential units and therefore, the assess'e.e is entitled to the benefit of Section 54. As suCh;~--S_tie'__i'is iiable to pay the capital gains.
The order of the trimnai is in"ac:.Qrd--anc_efiinivithwiiaw an(;l ' does not suffer from any infirmitfl is dismissed.