| Case ID |
31b9a59c-e10a-422e-8c1f-c267def931e9 |
| Body |
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| Case Number |
TAX CASE No. 399 OF 1974 (REFERENCE No. 212 OF 197 |
| Decision Date |
Mar 07, 1978 |
| Hearing Date |
|
| Decision |
The court held that the assessee was not entitled to the benefit under section 54 of the Income-tax Act, 1961. The assessee had not used the residential house for the required two years preceding the sale date, as it was occupied for only one year and four months. The Tribunal's decision was affirmed, emphasizing that the wording in section 54 clearly requires continuous use of the property as a residential house for the entire two-year period before the sale. Thus, the revenue's stance was upheld, and the assessee was denied the capital gains tax relief sought under the provision. |
| Summary |
This case revolves around the interpretation of Section 54 of the Income-tax Act, 1961, regarding the capital gains tax exemption for the sale of residential property. The key issue was whether the assessee met the requirement of using the property as a residence for two years prior to the sale. The court concluded that the assessee's occupation of one year and four months did not satisfy this requirement. The ruling highlights the importance of adhering to the precise legal language in tax statutes. The decision reinforces the principle that ambiguities in tax law should be resolved in favor of the revenue, ensuring compliance with legislative intent. This case serves as a significant reference for future disputes concerning capital gains tax exemptions, particularly in residential property transactions. |
| Court |
Madras High Court
|
| Entities Involved |
Not available
|
| Judges |
P. Govindan Nair, C.J.,
V. Ramaswami, J
|
| Lawyers |
K.S. Shivaraman,
B. Kumar,
Mrs. Nalini Chidambaram
|
| Petitioners |
M. Viswanathan
|
| Respondents |
Commissioner of Income tax
|
| Citations |
1979 SLD 953,
(1979) 117 ITR 244
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
54
|