TMI Blog2018 (2) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue is directed against the order passed by the CIT(A)-10, Mumbai, dated 17.02.2016, which in itself arises from the order passed by the A.O under Sec.143(3) of the Income tax Act, 1961 (for short Act ), dated 04.03.2014. The revenue assailing the order passed by the CIT(A) had raised before us the following grounds of appeal:- 1(a). On the facts and in the circumstances of the case, the ld. CIT(A) erred in directing the AO to allow the exemption claimed by the assessee under section 54F without appreciating the fact that the assessee was already the beneficial owner and co-owner of two properties on the date of transfer of the original asset i.e. tenancy rights in Sylverton Building . 1(b). On the facts and in the circumstances of the case, the Ld. CIT(A) failed to appreciate that the proviso to section 54F(1) stipulates that the provisions of section 54F(1) shall not apply where the assessee owns more than one residential house, other than the new asset, on the date of transfer of the original asset. 1(c). On the facts and in the circumstances of the case, the Ld. CIT(A) erred in holding that the Tara Manzil Noor Manzil properties owned by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tood vested were protected under the provisions of Maharashtra Rent Control Act, 1999, therefore, the said respective properties could by no means be used by the assessee for the purpose of his own residence. However, the submissions of the assessee did not find favour with the A.O who disallowed the claim of deduction raised by the assessee under Sec. 54F and brought the LTCG of ₹ 1,00,00,000/- arising on the surrender of the tenancy rights to tax in the hands of the assessee. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions of the assessee, viz. (i) the properties under consideration, i.e. Tara Manzil and Noor Manzil were commercial properties and not residential properties; (ii) that as the properties were tenanted and the assessee did not have any occupancy rights in the said properties but only limited legal ownership and rent collection rights; and (iii) that even if the respective properties were to be taken as residential properties, as the assessee had only a share in the properties, i.e. 25 % in Tara Manzil and 20% in Noor Manzil, therefore, he was not the absolute owner of the same, did f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent held a conviction that as the assessee on the date of purchasing the new residential property, viz. Oberoi Splendour, owned two house properties, i.e. Tara Manzil and Noor Manzil, therefore, the assessee as per proviso of Sec. 54F(1) was disqualified for claiming the deduction under the said statutory provision. We have deliberated at length on the observations of the CIT(A) and find that he had observed that the two house properties, i.e. Tara Manzil and Noor Manzil which were owned by the assessee before purchase of the new property from Oberoi Constructions, were commercial properties and not residential properties. We find that nothing has been placed on record, nor averred before us by the Ld. D.R. which could persuade us to conclude that the aforesaid observations of the CIT(A) are either perverse or militated against the actual factual position. We find that the disqualification contemplated in the proviso of Sec. 54F(1) comes into play only where the assessee on the date of transfer of the original asset owns more than one residential house, other than the new asset. We are of the considered view that as observed by us hereinabove the properties under consideration, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards claim of deduction under Sec. 54F had distinguished a joint ownership as against an absolute ownership of a residential property, by observing as under : 7. The only question remains as to whether assessee can be said to be the owner of that residential house. The legislature has used the word a before the words residential house . In our opinion, it must mean a complete residential house and would not include shared interest in a residential house. Where the property is owned by more than one person, it cannot be said that any one of them is the owner of the property. In such case, no individual person on his own can sell the entire property. No doubt, he can sell his share of interest in the property but as far as the property is considered, it would continue to be owned by co-owners. Joint ownership is different from absolute ownership. In the case of residential unit, none of the co-owners can claim that he is the owner of residential house. Ownership of a residential house, in our opinion, means ownership to the exclusion of all others. Therefore, where a house is jointly owned by two or more persons, none of them can be said to be the owner of that house. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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