Section 54F exemption turns on substantive ownership of another residential house, not mutation entries, after estate administration.

Exemption under section 54F depends on whether the assessee owns another residential house at the time of investment in the new property. In this matter, title to the Jor Bagh house was found to have vested in the legatees because the estate had already been administered and the executor's assent to the specific bequest could be inferred from conduct and correspondence. Mutation in land records was not treated as a condition for vesting of title. On those facts, the assessee was treated as the owner of another residential house and was not entitled to the section 54F exemption.

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Issues: Whether the assessee was entitled to exemption under section 54F of the Income-tax Act, 1961, or whether she was disqualified on the ground that she owned another residential house property at Jor Bagh.

Analysis: The assessee had purchased a new residential house after selling shares and claimed exemption under section 54F. The dispute turned on whether her alleged 1/4th share in the Jor Bagh property still remained in the executor's hands or whether the estate had already been administered so that title had passed to the legatees. Applying the Indian Succession Act, 1925, the Court held that the executor's assent to a specific bequest may be express or implied from conduct, that mutation in the land records was not a condition for vesting of title, and that the facts showed administration of the will had been completed before the relevant previous year. The conduct of the executor and the legatees, together with the L&DO correspondence and the assessee's own admissions, established that the property had been distributed and that the assessee had become owner of the residential property.

Conclusion: The assessee was not entitled to exemption under section 54F because she was the owner of another residential house property when the new house was purchased.

Ratio Decidendi: For section 54F, ownership of another residential house is determined by substantive title arising on completion of administration of the estate and assent of the executor, and mutation in official records is not ant of ownership where the legacy has otherwise vested.

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