Please assign a menu to the primary menu location under MENU

Tuesday, June 23, 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 weeks 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

Purpose Investments Inc. Announces June 2026 Distributions

3 hours ago
TORONTO, June 17, 2026 (GLOBE NEWSWIRE) -- Purpose Investments Inc. (“Purpose”) is pleased to announce distributions for the month of...
Upcoming Investments

Community Park at Fair Park receives $2.5M investment

3 hours ago
Fair Park First and the Dallas Park and Recreation Department announced a $2.5 million donation Thursday from the McKesson Foundation...
Upcoming Investments

Ivory Coast accelerates offshore exploration and production

5 hours ago
Ivory Coast strengthens its offshore sector with new drilling, production expansion and energy financing initiatives. Ivory Coast continues to strengthen...
Upcoming Investments

Smart Investment Property Decisions Are Helping Build Black Wealth

6 hours ago
By Dax Janel Valencia Smart investment property decisions are helping Black Americans build wealth by creating an additional source of cash flow, usually through monthly rental payments. They also create long-term financial well-being by allowing those in the Black community to generate property equity.  Making smart real estate investing decisions remains crucial to Black Americans, as huge gaps in racial wealth and homeownership still exist. As the National Community Reinvestment Coalition (NCRC) reports, compared to the median Black family, the median white family has 6.5 times more wealth.  What Constitutes an...

latest updates

Stock Market

Stock market today: Dow, S&P 500, Nasdaq futures waver as Wall Street weighs US-Iran talks, AI trade

49 minutes ago
Currencies

Boeing and Tajikistan: Is There Hard Currency Behind the Soft Power?

2 hours ago
Stock Market

Stock Market Today, June 22: Super Micro Computer Jumps After Introducing New Platform Accelerating AI Server Backlog Growth

2 hours ago
Upcoming Investments

Purpose Investments Inc. Announces June 2026 Distributions

3 hours ago

find us on socials

popular updates

Rocket Companies: RKT Stock To $40?

10 months ago

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

9 months ago

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

9 months ago

latest updates

Stock market today: Dow, S&P 500, Nasdaq futures waver as Wall Street weighs US-Iran talks, AI trade

49 minutes ago

Boeing and Tajikistan: Is There Hard Currency Behind the Soft Power?

2 hours ago

Stock Market Today, June 22: Super Micro Computer Jumps After Introducing New Platform Accelerating AI Server Backlog Growth

2 hours ago

random updates

UK House Prices Surge 3.5% in May 2025 Amid Economic Recovery, ET RealEstate

1 year ago

Morocco Plans to Boost Desalination Investments 112% by 2033

7 months ago

S&P 500 Flat as Treasury Yields Fall Ahead of Key US Payrolls and CPI Data

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

Copyright © 2023 Cash Insight. All Rights Reserved.