HC upholds Sec 54(1) exemption benefit in respect of 2 separate residential houses purchased to avoid disharmony / litigation between brothers, facts and circumstances show no intention to evade tax; Interprets that letter “a”, being an indefinite article, should not be construed as singular in the present context, legislative intention behind expression “a residential house” in Sec 54(1) does not convey that it refers to a single residential house; Relies on Karnataka HC ruling in Rukminiamma; However, cautions that such beneficial interpretation should be adopted by Courts / Tribunals and Authorities only after keeping in mind facts of a particular case, not in a case where attempt is made to avoid tax; Unutilized capital gain taxable u/s 54(2) only in the previous year in which the period of three years from the date of the transfer of the original asset expires, not immediately after purchasing new asset : Karnataka HC [KHOOBCHAND M MAKHIJA 2013 KAR]
Posted on: Thu, 13 Mar 2014 04:42:55 +0000