From Financialexpress · Mithilesh Jha · · 2m
Mumbai man sells one house, buys multiple properties: ITAT still allows tax exemption
Mumbai ITAT allows tax exemption for multiple property investments under old rules.
In brief
Mumbai ITAT allows tax exemption for multiple property investments under old rules. Tax tribunal permits capital gains tax exemption for investors who bought multiple properties under pre-2014 tax laws. Originally reported by Financialexpress.
ITAT ruling on tax exemption
Mumbai ITAT allowed taxpayer's Section 54 capital gains tax exemption for investments in multiple properties under old tax rules applicable to assessment year 2013-14.
Exemption amount allowed
The tribunal also allowed Rs 20.44 lakh spent on making newly purchased flat habitable.
Relevant for older transactions
The ruling is relevant for taxpayers dealing with older property transactions as the tribunal examined the version of Section 54 that applied before the law was amended in 2014.
Case details
Vivek Juneja versus Assistant Commissioner of Income Tax Mumbai for assessment year 2013-14 was decided on May 29, 2026.
Tax dispute origin
Juneja and his mother jointly owned a residential property they sold during relevant financial year.
Sale proceeds
Juneja received Rs 23.76 crore representing his 50% share of sale consideration.
Property purchase
He purchased a flat in Raj Classic building for Rs 4.90 crore and later invested in two more properties.
Tax department objection
Assessing Officer took view Juneja could not claim exemption for additional properties after claiming for one flat.
Capital gains account scheme
The amount remaining after investments was deposited in Capital Gains Account Scheme.
Section 54 interpretation
The tribunal held earlier Section 54 did not restrict exemption to one residential house in these circumstances.
Amendment timeline
The Finance Act 2014 changed Section 54 wording from 'a residential house' to 'one residential house in India' effective April 1, 2015.
Tax tribunal decision
The tribunal agreed with taxpayer that amendment applied prospectively and could not be used retrospectively for his case.
Home improvement expenses
ITAT allowed Rs 20.44 lakh spent on making flat habitable after examining invoices and interior designer letter.
What this means for taxpayers
Taxpayers must check which version of tax law applies to their property transaction and maintain proper records.
The main idea
Tax tribunal permits capital gains tax exemption for investors who bought multiple properties under pre-2014 tax laws.
