TMI Blog2022 (6) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... records that the Indiabulls property was under construction and the possession was handed over to the assessee only on 28.12.2016, till such time income from the said property was not chargeable under the head Income from house property and hence the condition stipulated in clause (b) of proviso to sec. 54F (1) disentitling claim u/s 54F is not satisfied. - Decided in favour of assessee. - I.T.A No.5453/Mum/2019 - - - Dated:- 14-6-2022 - Shri Vikas Awasthy (Judicial Member) And Shri Gagan Goyal (Accountant Member) For the Assessee : Shri Anil Sathe For the Department : Shri Anoop Hiswase, DR ORDER PER: GAGAN GOYAL (AM): This appeal has been filed by the assessee against the order dated 17/06/2019 passed by the Commissioner of Income-tax (Appeals)-55, Mumbai for the assessment year 2013-14. 2. The grounds raised by the assessee pertain to grant of deduction u/s 54F of the I.T. Act, 1961. 3 The facts governing the issue are that assessee, an individual, derives income from salary, business, LTCG and Income from other sources, has filed his return of income on 29/09/2013 declaring total income at Rs.45,03,410/-. The return of income filed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no allotment letter issued to assessee; therefore, the claim of the assessee that India bulls property was purchased in 2009-10 was rejected. 3.1 The assessing officer further observed that had the claim of the assessee was India bulls property was purchased in FY 2009-10 was accepted, it would mean that as on the date of transfer of original asset, the assessee had the following two residential houses: 1. Pune Kohinoor flat which was sold on 07/08/2012 2. India bulls property which according to assessee was purchased during F.Y. 2009-10. On this, the assessee submitted that investment in India bulls property was made jointly with assessee s wife, Mrs.Yamini Gawande. To avail exemption u/s 54F what is required is the assessee should not own more than one residential house on the date of sale and further assessee should not purchase any other residential house other than the new asset within a period of one year after the date of transfer of the original asset. 3.2 The assessing officer, however, did not accept the submissions of the assessee. He observed, the assessee purchased India bulls property jointly along with his wife. Therefore, the assessee was not the full ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bawa vs. ACIT (53 ITD 232) wherein it was held that when an assessee has become owner of a share (fractional) in property bequeathed to her by her mother, by the time the assessee purchased another property, she could not claim exemption u/s. 54F of the Act. In the case of Ravinder Kumar Arora (supra) it was held that the assessee having invested the entire amount of long term capital gain in purchase of new residential house was entitled to exemption u/s. 54F in respect of the entire amount even though the new property was in the joint names of assessee and his wife. In view of the foregoing discussion, if an assessee jointly owns more than one property, then the assessee is not entitled for deduction u/s. 54F of the Act. v) If assessee's contention that 'part ownership is not the ownership' is accepted that in all cases wherein any assessee, anywhere in India, claims benefit u/s 54/54F/ or any other section of Income tax Act, 1961 by investing jointly in a residential property should be denied the benefit wherein relevant section of Income Tax Act, 1961 states 'assessee purchases/owns a residential house'. Accordingly it is decided that on the date of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.AR further drew our attention to a slew of judicial precedents to rebut the point that the assessee was, in fact, the owner of the property at India bulls, as on the date of sale of land at Jambhe. Some of them are 1. Ashok G Chauhan v. ACIT (2019) 105 taxmann.com 204 (Mum) 2. ITO vs Rasiklal N Satra (2006) 98 ITD 335 (Mum) 3. DCIT vs Shri Dawood Abdulhussain (ITA No.3788/Mum/2016) 4. CIT vs Kapil Nagpal (2015) 63 taxmann.com 366 (Del) 5. Dr Smt. P.K. Vasanthi Rangrajan vs CIT (2012) 23 taxmann.com 299 (Mad) 6. Amit Gupta vs ACIT (2017) 81 taxmann.com 445 (Del- Trib.) 7. Ram Prakash Miyan Bazaz vs DCIT (2014) 45 taxmann.com 550 (Jaipur) 8. George Dominic (2013) 35 taxmann.com 547 (Cochin) 6. The learned departmental representative, on the other hand, relied upon the orders of the authorities below and submitted that applying the proviso (a) (i) a (ii) to section 54F, exemption under section 54F cannot be allowed to the assessee. In fact, the assessee has hidden the fact of ownership of the property held at Pune. 7. We have considered the rival submissions and perused the materials placed on record. We have thoroughly analyzed the citations relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee before the Tribunal that as per the judgment of the High Court of Madras in the case of Dr. Smt. P .K. Vasanthi Rangarajan (supra) unless and until there were materials to show that the assessee was the exclusive owner of the residential property, the harshness of the proviso could not be applied for denying exemption under section 54F of the Act. It was also contended on behalf of the assessee that the Madras High Court in this case had also held that when it was clear that as on the date of transfer, the assessee did not own residential house in her/his name only and was the holder of only 50% of share, then the provisions of section 54F of the Act would not create a rider and the assessee could be held entitled to exemption under 54F of the Act. This argument found favour with the Tribunal and the Tribunal held at para 12 as under- Hence, we are inclined to hold that the issue raised by the assessee is squarely covered in favour of the assessee by the judgment of the Hon'ble Madras High Court in the case of Dr. Smt. P .K Vasanthi Rangarajan (supra) and the assessee cannot be denied exemption under section 54F of the Act merely because he was the holder of 50% of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of three years after the date of transfer of the original asset; and (b) The income from such residential house, other than the one residential house owned on the date: of transfer of the original asset, is chargeable under the head Income from house property . Therefore the conditions in the proviso are cumulative and both have to be satisfied before the exemption can be denied. 1. The appellant has claimed exemption u/s 54F (1) in respect of Abhimanshree Property at Pune. He contends that India Bulls Property was purchased on 09.10.2009 (Ref letter dated 26.02.2016-recorded in assessment order on page no. 3 and 4 of the Assessment Order). Therefore, there is no violation of condition under clause (a)(ii) of proviso to sec. 54F(1) that the assessee should not purchase any residential house other than the new asset within one year from the date of transfer. The Appellant further contends that The India bulls property was owned jointly by the appellant along with his wife. The ownership in the property is fractional ownership or joint ownership and not an exclusive ownership of the appellant. As such the condition provided in clause (a)(1) of proviso to se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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