Ravi Shankar Vs. ACIT (ITAT Mumbai)
It was submitted by the ld. A.R that the term “a residential house” nowhere provided any restriction as regards the number of the residential houses in which an investment could validly be made by an assessee for claim of deduction under Sec. 54 of the Act. The ld. A.R in order to fortify his aforesaid contention submitted that the legislature in all its wisdom had substituted the term “a residential house” by “one residential house in India”, vide the Finance (No. 2) Act. 2014, with effect from 01.04.2015. It was thus the claim of the ld. A.R that as the aforesaid amendment which restricted the entitlement of an assessee towards claim of deduction under Sec. 54 to one residential house in India was made available on the statute with effect from A.Y 2015-16 and was prospective in nature, therefore, the same would have no bearing to the case of the assessee for the year under consideration. Per contra, the ld. D.R relied on the orders of the lower authorities.
We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find that Sec. 54 of the Act which provides for a deduction to an assessee in respect of the capital gain that arises from transfer of a long term capital asset being a residential house, as was available on the statute during the year under consideration, viz. A.Y 2012-13, clearly provided that the deduction would be available to an assessee either where he had within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed „a residential house‟. We find that the legislature in all its wisdom had came up with a prospective amendment to Sec. 54 of the Act, vide the Finance (No. 2) Act, 2014 with effect from 01.04.2015, as per which the term “a residential house” was substituted by “one residential house in India”. We are of the considered view that the pre- amended Sec. 54 as would be applicable to the case of the present assessee, by using the term “a residential house” though characterized the nature of investment and thus required that the investment was to be made towards purchase or construction of a residential house, but however, it did not place any restriction as regards the number of residential houses in which the assessee could invest for claiming deduction under the said statutory provision. We are of the considered view that the amendment made available on the statute, vide the Finance(No.2) Act, 2014, with effect from 01.04.20 15, pursuant whereto the term “a residential house” had been substituted by “one residential house in India”, rather supports the fact that the restriction of making the investment in only one residential house had been made available on the statute only with effect from A.Y 2015-16, and as such cannot be extended to the years prior to that.
