Joint ownership of properties disqualifies assessee from exemption under section 54F

The Tribunal ruled that the assessee, owning two residential properties, was not eligible for exemption under section 54F. The Tribunal emphasized that joint ownership constituted full ownership for the purpose of the exemption. Citing relevant cases, including Ravinder Kumar Arora vs. ACIT, the Tribunal overturned the CIT(A)'s decision and allowed the Revenue's appeal.

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Issues Involved:
1. Validity of the gift deed transferring property to a minor.
2. Eligibility for exemption under section 54F when owning more than one residential property.
3. Interpretation of joint ownership in the context of section 54F.

Detailed Analysis:

1. Validity of the Gift Deed Transferring Property to a Minor:
The assessee claimed a gift deed dated 2.4.2007 transferred property at 204, Meenakshi Royal Court, to her minor son. The Assessing Officer (AO) noted that the gift deed was unregistered and thus invalid. According to section 27, transferring property to a minor without adequate consideration does not change ownership. The AO concluded the gift deed was a device to claim exemption under section 54F. The CIT(A) agreed, noting the gift deed lacked legal sanctity due to non-registration and absence of proper attestation. The property was still in the assessee's possession and listed under her name in municipal records, indicating she remained the owner.

2. Eligibility for Exemption Under Section 54F When Owning More Than One Residential Property:
The AO observed that the assessee owned more than one house, disqualifying her from exemption under section 54F. The assessee argued that the property at "My Home Navadeep" was jointly owned with her husband and should not count as full ownership. The AO, however, cited that partial ownership still amounts to owning a residential property, referencing the case of Dr. P.K. Vasanthi Rangarajan vs. DCIT. The CIT(A) acknowledged differing judicial views but ultimately sided with the assessee, noting that joint ownership does not equate to full ownership for section 54F purposes, based on the Tribunal's decision in Rasiklal N. Satra.

3. Interpretation of Joint Ownership in the Context of Section 54F:
The CIT(A) examined whether joint ownership of the property at 301, My Home Navadeep, disqualified the assessee from section 54F exemption. The CIT(A) referred to the Tribunal's decision in Rasiklal N. Satra, which differentiated between ownership and absolute ownership, concluding that joint ownership does not constitute owning a residential house under section 54F. The CIT(A) found the assessee eligible for exemption, as she was not the sole owner of the second property.

Conclusion:
The Tribunal reversed the CIT(A)'s decision, emphasizing that section 54F's concession is not available if the assessee owns more than one residential house, wholly or partially. The Tribunal cited various cases, including Ravinder Kumar Arora vs. ACIT, where joint ownership was considered as full ownership. The Tribunal concluded that the assessee, owning both properties, did not qualify for section 54F exemption. Thus, the appeal by the Revenue was allowed, and the CIT(A)'s order was reversed.

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