Please assign a menu to the primary menu location under MENU

Friday, October 2, 2026
Cash Insight
  • Currencies
    • Investing in Currencies
  • Stock Market
  • UK Property
  • USA Property
  • Upcoming Investments
HomeUpcoming InvestmentsMultiple House Investments Eligible for Section 54 Deduction: ITAT
Upcoming Investments

Multiple House Investments Eligible for Section 54 Deduction: ITAT

4 months ago


Multiple House Investments Eligible for Section 54 Deduction: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that, under the unamended provisions of Section 54 of the Income Tax Act, 1961, deduction on capital gains cannot be restricted to investment in a single residential house. The Tribunal also allowed the assessee’s claim towards expenditure incurred for making a newly acquired property habitable and deleted the related disallowance.


Course Banner

“The expression ‘a residential house’ has been judicially interpreted to mean not a single residential house. Under the unamended provisions of Section 54, deduction was available even where capital gains were invested in multiple residential houses.”

The assessee had earned long-term capital gains from the sale of a jointly owned immovable property and received Rs.23.76 crore as his share of the sale consideration. While computing capital gains, he claimed a deduction under Sections 54 and 54EC and also claimed Rs 40.44 lakh as expenditure incurred on civil and electrical works in a newly acquired residential flat.

The Assessing Officer partly disallowed the expenditure, holding that certain items such as air-conditioning, furniture and kitchen-related works were not necessary for making the property habitable. On an estimated basis, only Rs 20 lakh was allowed, and the balance, Rs 20.44 lakh, was disallowed. The NFAC upheld the addition.


Course Banner

Before the Tribunal, the assessee contended that the expenditure was incurred entirely for civil and electrical works required to make the flat fit for occupation. The Tribunal examined the material on record, including the interior designer’s report and invoices, and found that the newly purchased flat was not in a habitable condition at the time of acquisition.

“Materials on record demonstrate that when the assessee acquired the flat, it was not in a habitable condition. The expenditure claimed was on account of various civil and electrical works undertaken in the newly acquired flat.”

The dispute also involved a deduction claimed under Section 54 in respect of investments made in multiple residential properties. After purchasing one residential property, the assessee deposited the unutilized capital gains in the Capital Gains Account Scheme and subsequently invested the amount in a plot of land for the construction of a house and another residential property. The Assessing Officer denied the claim on the ground that once a deduction had been claimed for one house, no further deduction was available.

Relying on the recent judgment of the Bombay High Court in Krishnagopal B. Nangpal v. DCIT, the Tribunal observed that prior to the amendment made by the Finance (No. 2) Act, 2014, Section 54 used the expression “a residential house”, which had consistently been interpreted by courts to include multiple residential houses.

The Bench further observed that the amount deposited in the Capital Gains Account Scheme was also eligible for deduction under Section 54(2), and any disallowance relating to unutilized deposits could arise only after the expiry of the prescribed three-year period.

Holding that the assessee’s claim was fully supported by the law applicable for the relevant assessment year, the Tribunal directed the Assessing Officer to allow the deduction under Section 54 and deleted the additions made by the department.

Thus, the appeal of the assessee was allowed.

To Read Full Order, Download PDF Given Below

Join StudyCafe Membership. For More details about Membership Click Join Membership Button

Join Membership

In case of any Doubt regarding Membership you can mail us at [email protected]



Source link

Tags :capital gainsCapital Gains Account SchemeCost of ImprovementHabitable House.Long-Term Capital GainMultiple Residential HousesSection 54
add a comment

Leave a Response Cancel reply

D.PatrickJune 2, 2026June 2, 2026
Brennan Investment Group Acquires 202,000 SF Industrial Manufacturing Facility in Knoxville, Tennessee
Wall Street poised to open lower even as AI and data center companies soar on still-hot demand | Stock Market

You Might Also Like

Upcoming Investments

CapitaLand Investment recognised for sustainability excellence in 2026 GRESB Assessment

10 minutes ago
- Consistent GRESB recognition for CapitaLand Investment (CLI), as well as its listed and private funds - Sustainability remains integral...
Upcoming Investments

Democratizing Access to Alternative Assets for 401(K) Investors – The White House

3 hours ago
Executive Order 14330 By the authority vested in me as President by the Constitution and the laws of the United...
Upcoming Investments

Dubai-based Tanzanians urged to actively invest in property back home

5 hours ago
Dar es Salaam. Tanzanians living and doing business in Dubai have been encouraged to channel part of their earnings into...
Upcoming Investments

Condor Announces Upsize of Financing to C$70 Million to Fund Infrastructure Investments for Field Compression in Uzbekistan and Modular LNG Facilities in Kazakhstan

9 hours ago
Base Shelf Prospectus Is Accessible, and the Shelf Prospectus Supplement Will Be Accessible Within One Business Day on SEDAR+ NOT...

latest updates

UK Property

Remote renovations: How Israeli investors can successfully upgrade UK properties

2 minutes ago
Upcoming Investments

CapitaLand Investment recognised for sustainability excellence in 2026 GRESB Assessment

10 minutes ago
USA Property

Palo Pinto Pavilion, Texas, USA property

1 hour ago
Stock Market

Prediction: This Stock Could Double Over the Next 5 Years

1 hour ago

find us on socials

  • Popular Updates
  • Recent

UK Property Prices Plummet in July: Rightmove Reports Historic DeclineETRealty

1 year ago

Japan eyes strategic investments in India’s EV and battery supply chain to counter China’s stranglehold

1 year ago

This High-Yield ETF Combines Bond Investing With Emerging Market Currencies

5 months ago

The Houston Deal Sheet (November 14, 2025)

11 months ago

Remote renovations: How Israeli investors can successfully upgrade UK properties

2 minutes ago

CapitaLand Investment recognised for sustainability excellence in 2026 GRESB Assessment

10 minutes ago

Palo Pinto Pavilion, Texas, USA property

1 hour ago

Prediction: This Stock Could Double Over the Next 5 Years

1 hour ago

popular updates

Rocket Companies: RKT Stock To $40?

1 year ago

India,UAE to start settling trade in local currencies soon – Economy News

1 year ago

The stunning UK seaside town known as ‘Devon’s Dubai’ | UK | News

1 year ago

latest updates

Remote renovations: How Israeli investors can successfully upgrade UK properties

2 minutes ago

CapitaLand Investment recognised for sustainability excellence in 2026 GRESB Assessment

10 minutes ago

Palo Pinto Pavilion, Texas, USA property

1 hour ago

random updates

Fake currency notes with face value of Rs 15.16 lakh seized in UP’s Muzaffarnagar, two held – ThePrint – PTIFeed

1 year ago

10 Weakest Currencies in the World, As of May 2026

5 months ago

This High-Yield ETF Combines Bond Investing With Emerging Market Currencies

5 months ago
  • Contact us
  • Terms and Conditions
  • Privacy Policy

Copyright © 2023 Cash Insight. All Rights Reserved.