Please assign a menu to the primary menu location under MENU

Monday, July 13, 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

1 month 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

Range Printing Advances Growth Strategy with Third RMGT Press Investment

43 minutes ago
SOLON, OH – When a company invests in the same press platform for a third time, the decision says as...
Upcoming Investments

Russell Investments’ ownership changes hands

8 hours ago
Home > Funds Management > Russell Investments’ ownership changes hands Yasmine Raso Senior Journalist 13 July 2026 Russell Investments’ owners,...
Upcoming Investments

Dhahirah targets RO50m in new agri investments by end of 2026

12 hours ago
Ibri – Dhahirah governorate is aiming to attract up to RO50mn in new investments by the end of 2026 as it...
Upcoming Investments

India posts world’s fastest growth in intangible investments, touches $78.2 billion: Piyush Goyal cites WIPO report – Economy News

13 hours ago
India has emerged as the fastest-growing major economy in intangible investments, with spending on assets such as software, research and development (R&D), intellectual property and organisational capabilities reaching $78.2 billion (around Rs 6.7 lakh crore) in 2023, according to the World Intangible Investment Report 2026. Highlighting the report’s findings, Union Commerce and Industry Minister Piyush Goyal said India is steadily strengthening its position as a global innovation hub, driven by investments in knowledge-based assets that are shaping the economy of the future. India tops growth among world’s 15 largest economies...

latest updates

Upcoming Investments

Range Printing Advances Growth Strategy with Third RMGT Press Investment

43 minutes ago
Stock Market

SK Hynix shares fall after stellar Nasdaq debut

2 hours ago
Currencies

With the prolonged high exchange rate, foreign currency deposits at local deposit banks have risen t..

2 hours ago
Currencies

Indian rupee and bonds likely to track Mideast developments, inflation data

2 hours ago

find us on socials

  • Popular Updates
  • Recent

VND To USD: Convert Vietnamese Dong to United States Dollar

11 months ago

Stock market today: Dow, S&P 500, Nasdaq futures sink as Iran conflict escalates – Yahoo Finance

4 months ago

Dow, S&P 500, Nasdaq rally stalls as Nvidia soars to record

1 year ago

Dow, S&P 500, Nasdaq close at record highs for second day as tech, trade headlines lift markets

10 months ago

Range Printing Advances Growth Strategy with Third RMGT Press Investment

43 minutes ago

SK Hynix shares fall after stellar Nasdaq debut

2 hours ago

With the prolonged high exchange rate, foreign currency deposits at local deposit banks have risen t..

2 hours ago

Indian rupee and bonds likely to track Mideast developments, inflation data

2 hours ago

popular updates

Rocket Companies: RKT Stock To $40?

10 months ago

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

10 months ago

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

10 months ago

latest updates

Range Printing Advances Growth Strategy with Third RMGT Press Investment

43 minutes ago

SK Hynix shares fall after stellar Nasdaq debut

2 hours ago

With the prolonged high exchange rate, foreign currency deposits at local deposit banks have risen t..

2 hours ago

random updates

Best Cryptocurrency Exchanges in April 2025

1 year ago

Trump Assault On Fed Autonomy Has Asia On A Razor’s Edge

12 months ago

Yen at record low: Should Indian investors be worried? Experts weigh in

2 weeks ago
  • Contact us
  • Terms and Conditions
  • Privacy Policy

Copyright © 2023 Cash Insight. All Rights Reserved.