2011 (8) TMI 1208 - AT - Income Tax

Tribunal confirms deduction under section 54F for part owner with multiple properties

The Assistant Commissioner of Income-tax, Central Circle-III (1), Chennai. Versus Shri K. Surendra Kumar, P/o M/s. Srinivasa Foundation,

The Tribunal upheld the CIT(A) decision, allowing the assessee to claim deduction u/s 54F despite being a part owner of multiple residential properties. ... - Issues involved: Appeal by Revenue against CIT(Appeals) order u/s 54F deduction for assessee owning multiple residential properties.Summary:1. The Revenue appealed against CIT(A) order directing A.O. to allow deduction u/s 54F for the assessee. Revenue argued that owning partial rights in residential property does not qualify for deduction u/s 54F, citing various judgments. 2. The assessee had sold shares and invested in a residential property, claiming deduction u/s 54F. The Assessing Officer denied the deduction as the assessee owned two other residential properties. CIT(A) held that joint ownership does not disqualify the assessee from claiming deduction u/s 54F, citing ITAT Chennai Bench decision.3. The Revenue contended that a part owner cannot be considered as owning a residential house for section 54F purposes, citing a Mumbai ITAT decision. The assessee argued in favor of CIT(A) order, referencing a Supreme Court decision on fractional ownership.4. The Tribunal noted conflicting judgments from Chennai and Mumbai Benches. Mumbai Bench's interpretation of the term 'own' in section 32 was applied to section 54F, leading to dismissal of Revenue's appeal as the assessee was only a part owner of the residential properties.Judgment: The Tribunal upheld the CIT(A) decision, stating that the assessee is entitled to deduction u/s 54F as a part owner does not qualify as owning a residential house. The appeal of the Revenue was dismissed.