CPT V24P7-Art1 (Content).pmd - Taxmann

a common passage, common kitchen, etc., it
would be a case of reinvestment in one residential
house and, hence, eligible for exemption for
all the flats. Accordingly, it upheld the claim
of the assessee and allowed exemption under
section 54F and held that the benefit of section
54EC is no way limited by the Statute and,
hence, was also allowable to the assessee.
In ITO v. Ms. Sushila M. Jhaveri [2007] 107 ITD
327 (Mum.) (SB) the Tribunal held that if the
assessee has acquired more than one residential
house, the benefit of exemption under section
54 or section 54F is limited to one residential
house only. Where the residential units are
independently located the benefit of exemption
cannot be extended to all the residential units
and would be limited to one residential unit
at the choice of the assessee.
CONCLUSION
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The Tribunal was emphatic to hold that the
benefit of exemption or denial of the same
must be in accordance with what is mandated
in law. When section 54EC mandates deposit
of long-term capital gain either in whole or
in part, the benefit has to be conferred in the
absence of any other condition limiting or
restricting the same.
The plea of the Revenue, that the entire benefit
of section 54F was to be denied, was something
more than what the Assessing Officer had
resorted to in the assessment. The Tribunal
opined that it could not enhance the assessment
than what was made by the Assessing Officer.
Readers may note that this power of enhancing
the income more than what is originally assessed,
however, is vested in the CIT(Appeals).
The above said analogy of availing twin benefits
by combination of investments falling under
different legal provisions could be thought of
by combining section 54 with section 54EC
also when a residential house is transferred
and yet another residential house is acquired
or constructed along with deposit in capital
gains bonds. Transfer of depreciable assets
held for more than 36 months with block ceasing
to exist and reinvestment in a residential house
covered by section 54F along with bonds specified
in section 54EC, could also be contemplated.
• DT - Secs. 54EC, 54F-EC - Asstt. CIT v. Deepak S. Bheda [2012] 23 taxmann.com 159 (Mum. - Trib.).
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