TMI Blog1980 (1) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... eds and other erections. On different occasions, portions of the land adjacent to the bungalow to the extent of 58 grounds were sold to various persons, and in 1966, he was in possession and enjoyment of the bungalow with the remaining extent of land of 53 grounds and 550 sq. ft. On August 13, 1966, the owner entered into an agreement with the firm known as M/s. Raghava and Veera, who were real estate dealers and contractors, for the sale of 53 grounds and 550 sq. ft. with the building for a consideration (if Rs. 4,20,000. Rs. 20,000 was paid by the purchaser to the assessee immediatedly, i.e., on August 13, 1966, and the balance of consideration was agreed to be paid in four equal instalments of rupees one lakh on or before April 15, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years 1968-69 to 1970-71. He attached a note claiming exemption from tax on capital gains on the basis of s. 54 of the Act. His case was that the capital asset sold by him was an item of property comprising a building and lands appurtenant thereto, the income of which is chargeable under the head " Income from house property " and that so far as he was concerned, he had effected a single transfer of the entire property to M/s. Raghava and Veera for Rs. 4,20,000, the transaction having been finalised only on July 9, 1969, when the last item of property was sold. For a period of two years immediately preceding that day, viz., July 9, 1969, the assessee claimed to have been occupying the house for the purpose of his residence. It was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted already. Section 54 of the I.T. Act, 1961, in so far as it is material, runs as follows : " Where a capital gain arises from the transfer of a capital asset to which the provisions of section 53 are not applicable, being buildings or lands appurtenant thereto the income of which is chargeable under the head ' Income from house property ', which in the two years immediately preceding the date on which the transfer took place, was being used by the assessee or a parent of his mainly for the purposes of his own or the parent's own residence, and the assessee has within a period of one year before or after that date purchased...... a house property for the purposes of his own residence, then, instead of the capital gain being charged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding in a portion of it. The assessee himself sold part of the lands even before 1966. This would go to show that the lands to that extent were not appurtenant to the bungalow; otherwise he could not have continued to reside in the building after the sale of those plots. Even after the earlier sale, the assessee was left with 53 grounds and 550 sq. ft. and a bungalow. This is nearly three acres. The fact that various sale deeds were executed with reference to each of the plots and the further circumstances that the real estate agent was required to obtain sanction from the Corporation of Madras for the sale of the vacant land in plots by making a layout, go to show clearly that those lands are not also appurtenant to the house property. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has pointed out that there is no evidence and, therefore, this contention cannot be accepted. The conclusion of the Tribunal is fortified by the circumstance that the assessee had taken another rented house from August 1, 1967. If he had not vacated, there was no need to take a rented house. The learned counsel for the assessee next contended that we must take the entire transaction as having become finalised only on July 9, 1969, and that the period of two years would have to be computed from that date. Even assuming that the learned counsel for the assessee is right in his submission that the transaction was completed on July 9, 1969, still in view of the interpretation placed by us on the expression " in the two years immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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