2016 (7) TMI 94

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..... denial of exemption under Section 54F of the Income-tax Act, 1961 (in short 'the Act'). He further submitted that the Assessing Officer disallowed the claim of the assessee under Section 54F of the Act on the ground that the assessee was owner of two houses on the date of sale of the land at Pallikaranai. Referring to the copy of the settlement deed as extracted by the CIT(Appeals), the Ld.counsel submitted that the settlement deed was executed subject to the life interest retained by the settlor, the assessee's mother. When the assessee's mother retained the life interest over the property, according to the Ld. counsel, no interest on the property will pass on to the assessee so long as the assessee's mother is alive. According to .....

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..... shall henceforth be entitled to deal with the same as full owner of the property without any obstruction or hindrance from the settlor or anyone claiming under them. Therefore, according to the Ld. D.R., even though there was a reference in the preamble of the settlement deed about the reservation of life interest retained by the settlor, in the body of settlement deed, the absolute property was transferred to the assessee by means of gift / settlement deed and the physical possession of the property was handed over to the assessee as a token of acceptance of the gift. Therefore, according to the Ld. counsel, the assessee is the absolute and full owner of the property which was conveyed to her by means of settlement deed. Hence, the assesse .....

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..... te of the sale of the land at Pallikaranai, admittedly, the assessee's mother, who settled the property, was alive. Therefore, the life interest retained by the assessee's mother over the property was very much available and the assessee could enjoy the property only subject to life interest of her mother. Therefore, this Tribunal is of the considered opinion that the property which was conveyed by her mother by way of settlement deed cannot convey full ownership. In other words, the assessee has ownership subject to the life interest retained by the assessee's mother. The question arises for consideration is whether such property can be considered as one of the residential houses for the purpose of denying exemption under Section 54F of th .....

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