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TMI Blog2022 (6) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... on Long Term Capital Gain (LTCG) of Rs.30, 46,299/- earned by selling Pune Kohinoor flat. During the course of scrutiny, assessing officer gathered information that assessee has purchased one more residential property after investment in property purchased from India bulls Properties Pvt Ltd. When confronted, assessee produced purchase agreement of Pune Abhimanshree CHS Ltd property. On going through the said agreement, the assessing officer noticed that this flat was purchased by assessee for a consideration of Rs.7.3 crore. The assessee explained that the assessee has purchased one more residential house other than the new asset on 04/05/2013 and that this transaction is within a period of one year after the date of transfer of original asset. Accordingly, applying proviso (a)(ii) to section 54F assessee was asked as to why his claim under section 54F should be allowed. In response, assessee explained that at the time of selling the land at Jambhe on 17/07/2012, the assessee held one property of India Bulls for which payment was made in the year 2009 and Pune property was purchased on 04/05/2013; therefore, as on 17/07/2012, the assessee had only one residential house at India bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case are different. In this case, assessee and her husband were co-owners to the extent of 50% share in a building that had a clinic and a residential house. It was held that since the entire property was not an exclusive residential property and 50% of the ownership was with reference to the clinic on the ground floor, the harshness of the proviso to Section 54 F cannot be applied. However in the case of our assessee, India bulls property is an exclusive residential property. Moreover, revenue did not accept the judgment in this case. ii). Assessee has cited CIT vs Kapil Nagpal case law to support his case. This judgment explicitly states that "unless there is a document to show that the assessee was a co-owner of the said building to the extent of even 15% there cannot be an inference in that regard." Delhi HC ruled in favour of assessee in this case stating that assessee was not even co-owner of the residential property, Moreover, language of the Delhi HC judgment in this case seems to suggest that in case of co-ownership in residential property, and assessee would have been denied the benefit of section 54F. In our case, as assessee is holding 50% share in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of Jambhe land on 17-07-2012 he had 1 residential house at India Bulls, his claim u/s 54F is denied u/s 54F proviso (a)(i)." 4. The appeal filed by the assessee did not find favour with the CIT (A). Therefore, the assessee has filed appeal before the Tribunal. 5. The learned authorized representative of the assessee submitted that the authorities below were not justified in denying the claim of exemption u/s 54F to the assessee. He submitted that the AO has erred in holding that the assessee was owner of two residential properties on the date of transfer of original asset and hence denying claim u/s 54F proviso (a) (ii). Without prejudice, the Ld.AR submitted that the learned AO has erred in not accepting that, flat purchased by the assessee jointly with his wife cannot be considered as exclusive property for the purpose of section 54F as laid down by ITAT Mumbai in ITO v/s Rasiklal Satra (2006) 98 ITD 335 (Mum). The learned AR then furnished the details of the properties, which are as under:- 1. Flat in Kohinoor CHSL, Pune purchased on 17/03/1998 2. Land at Jambhe acquired on 05/06/2009; 3. Flat in IndiabulIs' 'SKY' acquired on 17/12/2009 and was registered on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Dr. Smt. P .K. Vasanthi Rangarajan v. CIT [2012] 23 taxmann.com 299, the Tribunal held that joint ownership is not a bar for claiming exemption under section 54F of the Income-tax Act (the Act). The Hon'ble Madras High Court in this case has held that if a residential property is jointly owned by two persons that would not preclude the person (as an assessee) from claiming exemption under section 54F of the Act, as the assessee would not be hit by the proviso to section 54F of the Act - being not on exclusive owner of the residential property. But the Hon'ble Supreme Court in the case of M.J. Siwani v. CIT [2015] 53 taxmann.com 318 [judgment dated 10th November, 2014] affirmed the views of the Hon'ble Karnataka High Court by observing that "We find no reason to entertain this Special Leave Petition, which is, accordingly , dismissed". The Karnataka High Court had held in this case that in terms of provisions of section 54F of the Act, where assessee on date of sale of long-term capital asset owns a residential house even jointly with another person, and his claim for deduction of capital gain arising from sale of asset has to be rejected. 9. Decision of the Delhi Bench in Amit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nally, in view of our foregoing discussion, we dismiss the action of the AO as well as impugned order pertaining to the claim of deduction under section 54F of the Act and the AO is directed to allow the same to the assessee. 10. Synopsis of facts and contentions Chronological events relevant for the claim of exemption u/s 54F: Date Event Remarks Consideration (Rs.) Relevant Page No. of the Paperbook. 17.07.2012 Sale of Jhambe Land Capital Gains accruing from sale is subject matter of appeal 07.08.2012 Sale of Flat in Kohinoor CHSL, Pune 25.02.2013 Execution and registration of agreement for sale of Indiabulls "SKY" Property Initially sec 54F exemption was claimed in respect of this property. Booking on 9th October 2009, Payments of Rs. 2.40 crores prior to execution of agreement 12,08,81,000 Page No. 3 and 4 for "Joint Ownership" Page No. 11 for consideration 04.05.2013 Purchase of Bungalow in Pune in Abhimanshree CHSL Subsequently sec 54F exemption was claimed in respect of this property 7,30,00,000 Page No. 113 for Consideration "Appellant's contentions: The first proviso to section 54F which has been invoked ..... X X X X Extracts X X X X X X X X Extracts X X X X
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