TMI Blog1998 (1) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance. 4. The assessee is still aggrieved and has come up in appeal before the Tribunal. Shri A.K. Bhatia learned authorised representative appeared for the assessee and Shri Shantanu Dhamija the learned D.R. appeared for the revenue. After hearing both the parties, we are of the view that the claim of the assessee has not been properly processed in accordance with law. From the order of the Assessing Officer it is seen that there is no income assessed under the head 'Income from house property'. The claim for deduction in this case was for unrealised rent of the earlier years. In terms of section 24(1)(x) the amount in respect of rent from property let to a tenant which cannot be realised is to be deducted from the income char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e file of the Assessing Officer for fresh decision as indicated above. 5. The next ground is in regard to the claim of exemption under section 54F of the Income-tax Act. The assessee in this case owned a factory shed which was sold during the year. The sale proceeds were invested in the construction mezzanine floor with toilet and kitchen. The assessee therefore claimed that exemption under section 54F should be given to the assessee. The Assessing Officer rejected the claim on the reasoning that the assessee had already owned residential house on the date of sale of factory shed and moreover the assessee did not construct any new residential house but made only additions to the existing residential house. 6. Aggrieved by the said disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 54F." 7. The assessee is still aggrieved and has come up in appeal before the Tribunal. After hearing both the parties, we are of the view that the claim of the assessee has not been properly considered in accordance with law. From the order of the Assessing Officer and the CIT(Appeals) it is not doubted that the assessee sold the factory shed and the investment in the house property was made within the specified time. The only reasoning was that the assessee had already had a house and the construction also cannot be said to be a new residential house. The view taken by the Assessing Officer and the CIT(Appeals) is not in accordance with judicial interpretation. The Hon'ble Minister of Finance stated in his speech while moving th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n there is doubt about their meaning, are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used, and the object to be attained. The legislative object in enacting the exemption under section 54 is that when an assessee utilises the surplus money realised on the sale of the old house property, which was mainly in his or his parent's self occupation, for acquiring a new house property, which he purchases or constructs with the end in view of his own immediate resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of a unit for house property for the purpose of section 54. The Tribunal concurred the view of the AAC. When the matter came up before the High Court it was held :-- "The view taken by the Tribunal was unexceptionable having regard to the admitted position that the assessee after demolishing completely the first floor had put up a new construction within the period allowed by the statute viz section 54. It is also common ground that the assessee was in enjoyment of the entire property. Once the principle laid down in the judgments of the Delhi and Gujarat High Courts in Addl. CIT v. Vidya Prakash Talwar [1981] 132 ITR 661, and CIT v. Kodandas Chanchlomal [1985] 155 ITR 273, respectively, that 'house property' takes into accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nataka High Court in the case of J. R. Subramanyam. In that case also the assessee sold a building in February, 1977. In March, 1976 he had commenced construction of a new house which was completed in March 1977. The Assessing Officer did not allow the claim on the ground that the construction of the new building had commenced much earlier to the sale of the old building and the major portion of the building was let out by the assessee. When the matter came up before the Hon'ble High Court it was held that it was immaterial that the construction of the new building was started in 1976. The construction was completed in March, 1977 which was within two years from the sale of the old building. Therefore, the assessee was entitled to exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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