Section 54F ownership test turns on possession and taxable enjoyment, not just registered title, for residential house exemption.

Section 54F exemption is unavailable where, on the date of transfer of the original asset, the assessee already owns another residential house. Ownership for this purpose depends on possession, dominion and taxable enjoyment, not merely later registration of title. The assessee had been in possession of the Khar property since 1992-93, had let it out, and was assessed on the rental income as income from house property. In these circumstances, possession in part performance, read with Section 2(47)(v) of the Income-tax Act and Section 53A of the Transfer of Property Act, was sufficient to establish ownership for income-tax purposes. The claim for exemption therefore failed.

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Issues: Whether the assessee was entitled to exemption under Section 54F of the Income-tax Act, 1961 when, on the date of transfer of the original asset, she already owned another residential house and had possession and taxable enjoyment of it.

Analysis: The exemption under Section 54F is unavailable where the assessee owns, on the date of transfer, any residential house other than the new asset. Ownership for this purpose was found to depend not merely on conveyance but on possession, dominion, and entitlement to receive income from the property in one's own right. The assessee had been in possession of the Khar property since 1992-93, had let it out, and had been assessed on the rental income as income from house property. The deed was registered later, but under the statutory scheme and the deeming principle reflected in Section 2(47)(v) read with Section 53A of the Transfer of Property Act, 1882, possession in part performance was sufficient to establish ownership for income-tax purposes. The precedent allowing exemption where the assessee merely acquired a larger share in the same identifiable unit did not apply because the assessee here already owned another residential property.

Conclusion: The assessee was not entitled to exemption under Section 54F, and the claim failed.

Ratio Decidendi: For Section 54F, ownership of another residential house is determined by possession, dominion, and taxable enjoyment, not merely by registration of title.

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