Please assign a menu to the primary menu location under MENU

Saturday, August 22, 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

3 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

Could Investing $10,000 in Netflix Set You Up for Life?

5 hours ago
A stock investment that appreciates so much that you no longer have to work is a dream for many people....
Upcoming Investments

Ahead of Vibrant Summit 2027: Gujarat CM meets global business leaders in New York to drive investments in AI, fintech, and nuclear energy

6 hours ago
ANI | Updated: Aug 22, 2026 14:52 IST Gandhinagar (Gujarat) , August 22 (ANI): Gujarat Chief Minister Bhupendra Patel held...
Upcoming Investments

Westwood’s Urban Outfitters closes after 22 years following UC Investments acquisition

13 hours ago
Urban Outfitters’ Westwood location shuttered Thursday after over 22 years on Westwood Boulevard. The lifestyle retailer, which sold clothing, dorm...
Upcoming Investments

T. Rowe Price to Buy F/m Investments for $19B AUM

13 hours ago
T. Rowe Price Group is bolstering its fixed-income menu by agreeing to buy F/m Investments LLC, an asset manager with...

latest updates

Stock Market

U.S. stocks have done great for you. Don’t be greedy in this market

3 hours ago
UK Property

How influencers and tech billionaires are reshaping London’s super-prime property market

5 hours ago
Upcoming Investments

Could Investing $10,000 in Netflix Set You Up for Life?

5 hours ago
Stock Market

If a Stock Market Crash Is Coming, Warren Buffett’s Playbook Says Do This 1 Thing Right Now

6 hours ago

find us on socials

  • Popular Updates
  • Recent

Dow, S&P 500, Nasdaq futures fall after Wall Street’s bounce back

6 months ago

India’s gold reserves rise by $2.2 billion; forex stands at $700.23 billion – News Today

11 months ago

Iran war: Winners and losers – how di Iran war dey shake global currencies

3 months ago

Gov. DeSantis criticizes House for reinstating vetoed budget items

1 year ago

U.S. stocks have done great for you. Don’t be greedy in this market

3 hours ago

How influencers and tech billionaires are reshaping London’s super-prime property market

5 hours ago

Could Investing $10,000 in Netflix Set You Up for Life?

5 hours ago

If a Stock Market Crash Is Coming, Warren Buffett’s Playbook Says Do This 1 Thing Right Now

6 hours ago

popular updates

Rocket Companies: RKT Stock To $40?

12 months ago

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

11 months ago

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

11 months ago

latest updates

U.S. stocks have done great for you. Don’t be greedy in this market

3 hours ago

How influencers and tech billionaires are reshaping London’s super-prime property market

5 hours ago

Could Investing $10,000 in Netflix Set You Up for Life?

5 hours ago

random updates

Virginia’s opioid crisis cost $5.2B in 2023, recovery investments show promise

9 months ago

Navigating FPI outflows: Impact on India’s financial markets and currency – Opinion News

1 year ago

Geopolitical Risks and Their Impact on Indian Forex Trading in 2026

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

Copyright © 2023 Cash Insight. All Rights Reserved.