TMI Blog1995 (3) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... nd shares of the co-operative society on 25-6-1979. The flat being under construction thereafter possession was given on 1-1-1980. On the basis of the facts the assessee claimed exemption under section 54 of the Income-tax Act, 1961 ('the Act') in respect of the capital gains made by him. This was rejected by the ITO and also by the AAC. Thus, the matter is in appeal before the Tribunal. 2. Stressing the details as above, the learned counsel for the assessee has pointed out that his case comes clearly within the exemption provisions of section 54. From the peculiar nature of the ownership of flats in a co-operative society, the date of allotment and taking of possession (in this case on 1-1-1980) could at best be regarded as the date on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would appear, is based on an element of personal equity in the matter of residential accommodation and aimed at encouraging house construction. It is, thus, that the section provides for relief from capital gains where all assessee who has sold a property, purchases within one year or constructs within two years another property for residence. 5. There is no dispute that the assessee made an excess of Rs. 33,250 in the sale of his old flat. That the assessee has been planning to acquire residential accommodation by joining a co-operative society, making initial payment of Rs. 5,251 on 5-11-1977 is not in dispute. He subsequently made payments and finally completed the amounts due to the society. At one time it was claimed that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew technical requirements relating to and under the bye-laws of the co-operative society, the assessee can be said to be the full owner of the property. As a matter of fact, if not in law, therefore, it would be correct to say that the assessee has purchased a residential property. 6. If the meaning of the word 'purchase' is pushed to its technical limit perhaps the 'owner' of a flat in a co-operative society as above would not get the benefit of section 54. Even so, it would be against the very object and purpose of section 54 if such a flat owner is denied the benefit. Practically, in every big town in this country ownership flats are in fashion. This has been taken note of for the purpose of computing the property income by the Act by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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