Exemption u/s 54

[Divyesh Chhatbar]

One of my client sold a residential house in Mumbai for Rs. 80 lacs and generated LTCG of Rs. 40 lacs. He invested LTCG of Rs. 40 lacs in two residential houses, one in Mumbai and other in Pune. Whether entire LTCG of Rs. 40 lacs would be exempted u/s 54?

[satyanveshi]

as per the decision reported in 331 ITR 211 the investment in both the houses is eligible for exemption/deduction u/s 54. But I dont personally accept this decision.

[pawansingla]

Sorry , the mumbai special bench in ITO vs. Sushila Jhaveri 292 ITR (AT) 1 is directly against you.You can chhose any one of the house. Though there are judgement in investment in four houses was held to be elgible , but in these cases , facts were different. The units were side by side and converted into one unit for joint residence of all the members.

[sai prasad]

i am afraid you may not get exemption for both the houses, that are at different places. is it that the family makes use of two houses at different places. An useful reference may be made to the writeup of Sri K.Rajaratnam in the Landmark cases discussion in 331 ITR  journal 32

[prashantmaharishi]

in 331 ITR 211 four flats were purchased in one building in Rukminama ,s case and not flats in two cities. Therfore i think only one flats would be eligible for exemption .that case does not help assessee but goes aginst