MRS. MEERA JACOB. V/s. ITO - KERALA
SUBJECT : LONG-TERM CAPITAL GAINS
SECTION : 54F
FAVOUR OF : Department
313 ITR 411 (Ker)
HIGH COURT OF KERALA
HON'BLE C. N. RAMACHANDRAN NAIR & HON'BLE V. K. MOHANAN, JJ.
MRS. MEERA JACOB. V/s. ITO
09.06.2008
JUDGMENT
The judgment of the court was delivered by
C.N. RAMACHANDRAN NAIR J.-Heard senior counsel Sri Joseph Markose appearing for the appellant and standing counsel appearing for the respondent.
The question involved is whether the assessee, in the computation of long-term capital gains, is entitled to deduction under section 54F of the Income tax Act in respect of investment in modification/expansion of an existing residential house. The Tribunal took the stand that exemption is available only when the investment is in the construction of a house and not for investment in modification or renovation. Admitted facts are that the assessee had a fairly big house to which the assessee made addition of 140 sq. metres of plinth area.
However, it is the conceded position that the assessee has not constructed any separate apartment or house. Section 54F does not provide for exemption on investment in renovation or modification of an existing house. On the other hand, construction of a house only qualifies for exemption on the investment. Even addition of a floor of a self-contained type to the existing house would have qualified for exemption. However, since the assessee has only made addition to the plinth area, which is in the form of modification of an existing house, she is not entitled to deduction claimed under section 54F of the Act.
We, therefore, uphold the order of the Tribunal and dismiss the appeal.
