Arijit Pasayat, C. J.
At the instance of revenue , following question has been referred under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act), by the Tribunal, Delhi, Bench-B.-
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that section 54 of the Income Tax Act, 1961, applied to both an individual and an HUF, '
2. Factual position essentially is as follows:
The assessed is Hindu undivided family (hereinafter referred to as 'HUF'). Its original Karta K.C. Sahni died in 1967. His wife also died in 1970. For the assessment year in question, i.e. 1973-74, the members of HUF were B.K. Sahni and Shri K.L. Sahni, who had their own family members also. Shri B.K. Sahni was the Karta at the relevant time. The family owned a house at 23, Aurangzeb Road, New Delhi. It was sold for Rs. 15 lakhs by a deed of conveyance dated 26-5-1972. Subsequently on 15-5-1973, the assessed purchased another property at Hauz Khas, New Delhi, for Rs. 4,73,000. Claim of the assessed before the assessing officer was that above amount should be allowed as deduction in the computation of capital gains in terms of section 54 of the Act. The assessing officer did not accept the plea stating that two conditions are required to be satisfied before the assessed could claim deduction under the above section. First condition is that the capital which is in the form of building or land appurtenant thereto and whose income is chargeable under the head 'Income from house property' should have been used by the assessed or a parent of his mainly for the purpose of his own or the parent's own residence in two years immediately preceding the date on which the transfer took place, and second condition is that the assessed within a period of one year before or after that date should have purchased (excluding the period of construction) a house property for the purpose of his own residence. The first condition, according to the assessing officer, applied only to an individual and not to HUF. He, thereforee, held that the assessed was not entitled to relief under section 54 of the Act. Certain other factual aspects as regards actual residence was also considered and it was held that even the second condition was not satisfied. assessed carried the matter in appeal before the Appellate Assistant Commissioner (hereinafter referred to as, 'AAC') before whom photocopies of various documents were placed to show that the house was occupied first by K.L. Sahni from June, 1973 up to 1-1-1975, and then it was also occupied by B.M. Sahni from 15-12-1974, till the assessment was made. These documents were letters from MCD fixing rateable value of the property, certificates from educational institutions and bills of electricity and water charges as also various letters addressed to the members of the family at Hauz Khas residence. Since such evidence was produced before the Appellate Assistant Commissioner for the first time, he allowed an opportunity to the assessing officer to look into it and called for a report from her. After examining the record, the Appellate Assistant Commissioner found that K L. Sahni first resided at 15, Nizamuddin East which was purchased by him on 24-7-1952. After occupying it for a few months, K.L. Sahni moved to a rented house at 26, Nizamuddin East, where he lived till June, 1973, when he moved to a newly purchased Hauz Khas property. He left Hauz Khas property on 1-1-1975, but before that it was occupied by his brother B.M. Sahni in December. 1974. He did not find any evidence on record to suggest that the assessed had stated before the assessing officer that the above house was being used only at weekend. His conclusion was that Hauz Khas property remained occupied throughout by the members of the HUF. As regards applicability of section 54, he held that it not only applies to individual but also to HUF. He observed that HUF was capable of residing in a house and residence by the parents was alternative concession allowed to the assessed and it was not cumulative condition. Accordingly, he directed exclusion of Rs. 4,73,000 from the amount received by sale of property at Aurangzeb Road, New Delhi. Revenue preferred an appeal before the Tribunal. On hearing rival stands, Tribunal held that when two interpretations were possible of a taxing provision, one, which is helpful to an assessed has to be taken note of and applied. Accordingly, Appellate Assistant Commissioner's order was confirmed.
An application having been made, for reference, same was accepted and reference was made as aforesaid.
3. We heard learned counsel for the revenue . There is no appearance on behalf of the assessed in spite of service of notice. Learned counsel for revenue submitted that even if it is accepted that house was being used for residence of members of HUF, that itself was not sufficient to bring in application of section 54, which as it stood at the relevant time, reads as follows :
'54. Where a capital gain arises from the transfer of a capital asset to which the provisions of section 53 are not applicable, being buildings or lands appurtenant thereto the income of which is chargeable under the head 'Income from house property', which in the two years immediately preceding the date on which the transfer took place, was being used by the assessed or a parent of his mainly for the purpose of his own or the parent's own residence and the assessed has within a period of one year before or after that date purchased, or has within a period of two years after the date constructed a house property for the purposes of his own residence, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say :
(i) If the amount of the capital gains is greater than the cost of the new asset, the difference between the amount of the capital gain and cost of the new asset shall be charged under section 45 as the income of the previous year and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, at the case may be, the cost shall be nil.'
4. The conditions to attract applicability of section 54 up to assessment year 1982-83 are
(a) capital gains arises from transfer by the assessee, and
(b) of one or more buildings or lands appurtenant thereto, the income of which is chargeable under the head 'Income from house property', and
(c) to such capital gains provisions of section 53 are not applicable, and
(d) such house property was being used by the assessed or a parent of his mainly for the purposes of his own or parent's residence in two years immediately preceding the date of transfer, and
(e) the assessed has either within a period of one year before or after the date of transfer purchased a house property for the purposes of his own residence or has within a period of two years from the date of the transfer constructed a house property for the purpose of his own residence.
5. The crucial words, according to us, appearing in the provisions are 'being used by the assessed or a parent of his.' Reference was to the assessed as an individual, otherwise the question of parents of his, would not have arisen. Additionally, the expression, 'for the purpose of his own or his parents own residence' has been used. The requirement for getting the deduction is that 'the assessee' constructs a house property or purchases one within a specified period. It cannot be read in the manner suggested by the Assistant Commissioner of the Tribunal that the use of expression 'parents of his' was an additional concession given. Though there can be no quarrel with the general proposition that in case of ambiguity, the taxing provisions interpretation which favours the assessed has to be adopted. But there is no ambiguity in the provisions. As a matter of fact, intention of the legislature is very clear. The use of the expressions : 'assessee or parent of his' and 'purpose of his own or parents own residence' clearly indicates the legislative intent. It is also relevant to note that subsequently, the provision itself underwent substantial amendment by the Finance Act, 1987, operative from 1-4-1988. Exemption under section 54 were also extended to HUF after the amendment. Prior to that Board's Instruction No. 1081, vide letter No. 207/24/76-ITA-II, dated 3-8-1977, indicated the position in the manner we have dealt with. The amendments made by the Finance Act, 1982, made the position very clear. That was the state of law up to assessment year 1987-88. That being the position, the Tribunal was not justified in its conclusions. We answer the question in the negative against the assessed and in favor of assessed and in favor of the revenue .