Exemption u/s 54--Investment in Two houses

Hi Brijesh,

Yes, there shouldn't be a problem in claiming exemption u/s 54 in such a case. The words used in Section 54 are "a residential house". When we look at Section 54 vis-à-vis Section 54F, the condition of not owning more than one house on the date of transfer laid down in Section 54F stands out and sets it apart from Section 54, which contains no such stipulation. So profits from sale of two properties, provided they were both used for residence, can be invested to claim exemption u/s 54. Now let's look at the investment aspect. Can we invest in more than one house and claim exemption u/s 54? Black's Law Dictionary defines the indefinite article "a" appearing in legal texts as not necessarily relating to a singular item and that it is often used in the sense of `any' and is then applied to more than one individual object. The Strout's Judicial Dictionary too echoes similar views---the word `a', it says, is most frequently the equivalent of the word `any'. And Section 13(2) of our desi General Clauses Act says that singular includes the plural.There are plenty case laws in our favour too. In the case of Rattanlal Murarka [BCAJ 2003, IT Appeal No. 4485/(Mum.)/ 99], it was held that there is no bar imposed under section 54(1) on the assessee claiming exemption in respect of reinvestment of the capital gain in more than one house, provided other conditions of the section are satisfied. In this case the assessee had bought up two houses—-one in Thane and the other in Pune. The exemption was allowed in respect of the total investment made in two houses. Another case law in point is D. Anand Basappa v. ITO [2004] 91 ITD 53 (Bang.).In some cases though the courts have ruled that investment in only one house is eligible for exemption u/s 54. But enlightened opinion is more inclined towards not interpreting the meaning of article "a" appearing in Section 54 as to restrict it to a singular object only. This is also in keeping with the intention behind the introduction of Section 54--to incentivise housing in the country. Thanks,CA Sanjeev Bedi--- In ICAI_CIRC_MEERUT_ CA@yahoogroups. com, "gujratibrijesh" wrote:>> If any person sold two residential house property (long term capital > gain was arises ) and the sale consideration was invested in two > redidential house property can he claim exemption U/s 54 if any case > decided by court in this regard please send detail > > CA Brijesh Kr Gujrati> Varanasi>