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TMI Blog1986 (7) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... favour and registered on 3-3-1983 after the expiry of a period of one year contemplated by section 54. The ITO had allowed exemption to the assessee under section 54 of the Act. The Commissioner was of the view that the assessee had not constructed a new residential house as provided under the Act for claiming exemption under section 54 but had purchased the flat which was registered on 3-3-1983 long after the time limit and, therefore, he is not entitled for exemption allowed under section 54 by the ITO in the assessment of the assessee for the assessment year 1981-82. 3. The short point that arises for consideration in this appeal is whether the appellant can be said to have purchased the residential flat within a period of one year afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 54. Shri Swamy further submitted that the word 'purchase' occurring in section 54 must be construed liberally and not strictly so as to further the object for which that provision has been made. It was his plea that the Hon'ble Supreme Court in the case of CIT v. T.N. Aravinda Reddy [1979] 120 ITR 46, affirmed the decision of the Hon'ble Andhra Pradesh High Court in CIT v. T.N. Aravinda Reddy [1979] 116 ITR 551 and construed the release by co-owners whereby the assessee therein obtained a release of undivided interest of his brothers in the property, as a transaction of purchase within the meaning of section 54. He pleaded that if such a liberal construction is adopted for the purpose of effectuating the intention of the Legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The residential flat was conveyed to the assessee only on 3-3-1983 and till then the construction company was the owner of the flat. In the circumstances of the case, the conditions stipulated in section 54(1) are not satisfied. 6. As regards the alternative plea of the assessee that these agreements should be construed as agreements for construction, Shri Santhanam contended that such an interpretation is not called for. Section 54 contemplates exemption to the assessee and the said section should be strictly construed. He relied on a number of decisions in support of his contentions, chief among them being M. Ramanamma v. CWT [1986] 157 ITR 555 (AP) and Dr. (Mrs.) Mrudula A. Talwar v. ITO [1984] 10 ITD 928 (Hyd.). 7. We have heard ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --- ----------------- Total 2,26,116 ----------------- Summary Purchase consideration 2,05,000 Registration and stamps 21,116 ----------------- Total 2,26,116" ----------------- Within two years from the date of sale of the residential flat, the conveyance deed was executed and registered by Meridian Construction Co. in favour of the assessee and the assessee was put in possession of the property on 3-3-1983, the day the sale deed was executed. On all these facts, there is no dispute. 8. The dispute is with regard to the construction that is to be placed on the word 'purchase'. In our view, the expression 'purchase' occurring in section 54 is not synonymous with 'ownership' or 'transfer of legal title' whereas in sections 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' as buying for a price or the equivalent of price by payment in kind or adjustment towards old debt or for other monetary consideration, from the legal meaning of that word in section 54(1). Their Lordships further observed: "... The purpose is plain ; the symmetry is simple, the language is plain. Why mutilate the meaning by lexical legalism. We see no stress in the section on 'cash and carry'...." 9. In Mrs. Shahzada Begum v. ITO [1983] 5 ITD 292 (Hyd.), Bench 'B' of the Tribunal had to consider whether for purposes of section 54, date of agreement (to purchase) could be taken as date of purchase and whether the date of registration of sale deed for purchase is relevant or not. The Bench had to further consider whether the word 'purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one year. 12. The case of M. Ramanamma relied on by the learned departmental representative is not applicable to the issue on hand. In that case, one of the issues was whether the agricultural lands covered by the agreement to sell entered into by the assessee belonged to the assessee or not. The Hon'ble High Court held that in the absence of a sale deed duly registered conveying the property to the agreement holders, the property continued to belong to the assessee. In the case before us, we are not concerned with the ownership of the property. 13. Another case relied on by the learned departmental representative is the case of Dr. (Mrs.) Mrudula A. Talwar's case. In that case, the issue was whether, where the assessee acquires no intere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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