Section 54F exemption upheld where joint ownership and investment in four flats did not bar relief.

Section 54F exemption could not be denied merely because the assessee was shown as a joint owner of a residential property with her husband. The Court noted that only a 50% share was attributable to the assessee and part of the property was used as a clinic, so the residential portion was not established as being exclusively owned by her in her individual capacity. On that basis, the proviso to Section 54F was held inapplicable. Investment in four flats also did not, by itself, defeat the exemption. The assessee was therefore entitled to Section 54F relief.

---

---

Issues: Whether the assessee was disentitled to exemption under Section 54F of the Income-tax Act, 1961 on the ground that she owned a residential house on the date of transfer and whether investment in four flats affected the availability of the exemption.

Analysis: Section 54F, as it then stood, denied exemption where the assessee owned a residential house on the date of transfer and the income therefrom was chargeable under the head income from house property. The assessee's interest in the property was shown as joint ownership with her husband, with only 50% share attributed to her and part of the property being used as a clinic. On the facts, the residential portion was not shown to be exclusively owned by the assessee in her individual capacity. The Court held that the proviso could not be applied unless the assessee was the exclusive owner of the residential house in the relevant status. The investment in four flats did not prevent the assessee from claiming the benefit of Section 54F.

Conclusion: The assessee was entitled to exemption under Section 54F, and the appeal succeeded.

---