Investment in One House:
Whether Assessee can claim deduction u/s 54 and 54F simultaneously?
- Similar question arose in ITAT judgement in the case of Venkata Ramana Umareddy V/S Dy. CIT Cir-3 (3), Hyderabad (2013) (Appeal No. 552 (Hyd.) of 2012.
- The assessee has transferred as plot of land to a developer and on such transfer, he has earned long term capital gain. Also, in the same FY he has transferred his residential house and earned long term capital gain.
- The Assessee had claimed entire amount of capital gain for deduction u/s 54 and 54F by buying one residential property.
ITAT held as below:
- Reading of section 54 and 54F makes it clear that they are independent of each other and operate in respect of long term capital gain arising out of transfer of distinct and separate long term capital assets.
- There is no specific bar either u/s 54 or 54F or any other provision of the Act prohibiting allowance of exemption under both the sections in case the conditions of the provisions are fulfilled.
- The price of new residential house property is much more than the total long term capital gain and Net Sales Consideration as required by the respective sections.
- The long term capital gain arises from sale of two distinct and separate assets i.e., residential house and plot of land and the assessee has invested the entire capital gain in purchase of a new residential house.
- So he is entitled to claim exemption u/s 54 and 54F simultaneously.
Conclusion: So, from the aforementioned case law we can conclude that an assessee can claim deduction u/s 54 and 54F simultaneously, subject to that the same has been acquired in fulfillment of the conditions stipulated under the said sections.
The copy of the order is as under: