Case Law Details
Shri Arunkumar Nathan Vs Asst. Commissioner of Income Tax (ITAT Bangalore)
In the case of the assessee two flats were purchased in different localities and undisputedly no connection or nexus with each other then the case of the assessee has to be decided by considering the purpose, objective and scheme of provision as incorporated in the statute. The provision does not restrict the assessee from buying more than one asset but this incentive is provided under Section 54/54F only against the property so purchased or constructed for his residential purpose. Therefore these provisions will apply in the case of house property which is purchased or constructed for the assessee’s own residential purpose. This intention of the legislature is clear from the fact that the benefit of these provisions of Section 54/54F are available only to the individual and later on extended to HUF and not available to the artificial person. Having regard to object and purpose of the provision if a property though actually purchased or constructed is not to be used for the purpose of residence by the assessee then allowing the benefit under Section 54/54F on such investment will defeat the very purpose for which this beneficial provisions have been inserted in the statute.
Therefore, in the case of more than one properties are purchased by the assessee, the option is available with the assessee to claim benefit under Section 54 in respect of the residential house purchased for the assessee’s own residence.
When the assessee has purchased two separate houses in different localities which are not adjacent to each other and further one of the houses was let out by the assessee and was not intended to be used for his residential purpose clearly manifest the intention of the assessee to purchase two separate houses not to be used as one residential house disentitle the assessee to claim the benefit under Section 54 in respect of both the houses.
Two house purchased in two different localities cannot be treated as singular unit for claiming benefit / Exemption under section 54 / 54F of Income Tax Act, 1961.
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