Case Law Details
Arun K Thiagarajan Vs CIT (Appeals) (Karnataka High Court)
In the case of Arun K Thiagarajan vs. CIT (Appeals), the Karnataka High Court addressed an appeal under Section 260A of the Income Tax Act, 1961, pertaining to the assessment year 2003-04. The appeal was admitted based on the substantial question of law regarding the entitlement of the assessee to claim exemption under Section 54 of the Act, despite purchasing more than one house.
The factual background of the case involved the assessee selling a residential property in Chennai and claiming exemption under Section 54 for investments made in two residential properties in Bangalore. The assessing officer initially restricted the exemption to one property based on the decision in ITO vs. SMT.H.V.Rajlakshmi by the Income Tax Appellate Tribunal (ITAT). Subsequently, the Commissioner of Income Tax (Appeals) partially allowed the appeal, maintaining that the exemption under Section 54 could not be granted for investments in multiple properties.
The assessee then appealed to the ITAT, which upheld the decision of the Commissioner of Income Tax (Appeals) regarding the denial of exemption under Section 54. However, it made adjustments to the valuation of the property.
The key contention raised by the assessee was regarding the interpretation of the expression “a residential house” in Section 54(1) of the Act. The assessee argued that the expression should not be construed as singular but should include plural interpretations, citing various decisions from different High Courts, including the Karnataka High Court.
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