RAMANUJAM J.


The following two questions have been referred to this court for its opinion by the Income-tax Appellate Tribunal at the instance of the Revenue :


1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the sum of Rs. 37,435 was not assessable under section 45 of the Income-tax Act read with section 54 in the hands of the assessee ?


2. Whether the Appellate Tribunal's view that for allowing exemption under section 54 of the Income-tax Act, unbroken or continuous period of two years of residence is not necessary is sustainable in law ?


The substantial question to be considered is whether the assessee can claim exemption under section 54 of the Income-tax Act, 1961, in respect of a residential house, even though the house in question has not been used by the assessee or his parents for an unbroken or continuous period of two years as residence. The Tribunal has taken the view that residence for an unbroken or continuous period of two years is not necessary for claiming the exemption. Subsequent to the decision of the Tribunal in this case, this court has taken a uniform view that the residence should be proved for an unbroken or continuous period of two years for claiming exemption under section 54 in M. Viswanathan v. CIT, CIT v. R. Mala and S. Radhakrishna v. CIT. The above decisions clearly cover the questions referred to us. The learned counsel for the assessee, however, refers to a decision of a single Judge of the Delhi High Court in S. Harnam Singh Suri v. CBDT, which has taken a view different from the one taken by this court in the decisions referred to above. We would, however, prefer to follow the decisions rendered by this court in preference to the decision rendered by the Delhi

High Court in S. Harnam Singh Suri v. CBDT. Following the decisions of this court referred to above, we answer the questions in the negative and in favour of the Revenue. There will be no order as to costs.