TMI Blog1985 (3) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... co-operative society on 25th June, 1979. The flat being under construction thereafter, possession was given on 1st Jan., 1980. On the basis of the facts the assessee claimed exemption under s. 54 of the IT Act in respect of the capital gains made by him. This was rejected by the ITO and also the AAC. Thus the matter is an appeal before the Tribunal. 2. Stressing the details as above, the ld. counsel for the assessee has pointed out that his case comes clearly within the exempt on provisions of s. 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 1st Jan., 1980 could at best be regarded as the time the assessee purchased the flat. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial accommodation and aimed at encouraging house construction. It is thus that the s. 54 provides for relief from capital gains where an 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 5th Nov., 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 assessee has taken loan from Bombay Municipal Corporation and was returning the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the technical limit perhaps the 'owner' of a flat in a co-operative society as above would not get the benefit of s. 54. Even so, it would be against the very object and purpose of s. 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 IT Act by deeming the property as belonging to the member. In applying the provisions of s. 54 to such a contingency, it would not be, as claimed by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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