Reinvestment exemption for residential property denied where new property not in assessee's name; other cost claims remitted for verification.

Deduction claims for cost of improvement and brokerage on sale of Chennai property were not decided on merits and the Tribunal remitted those claims to the assessing officer for verification of documentary evidence and fresh adjudication. The claim for indexed cost of acquisition/construction of the Bangalore property was restored to the assessing officer to determine indexed cost after submission and verification of supporting details. The Tribunal, applying the binding precedent of the Bombay High Court, denied reinvestment exemption where the new residential flats were not registered in the assessee's name.

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Issues: (i) Whether the assessee is entitled to deduction for cost of improvement and brokerage claimed on sale of Chennai property; (ii) Whether the assessee's claim for indexed cost of acquisition/construction of Bangalore property (Amos-5) was correctly disallowed and required determination; (iii) Whether exemption under Section 54 of the Income-tax Act, 1961 is available where the purchased flats were in the name of the assessee's wife and son.

Issue (i): Entitlement to deduction for cost of improvement of Rs.25,00,000 and brokerage of Rs.3,48,316 on sale of Chennai property.

Analysis: The Tribunal noted that documentary evidence was not produced before the assessing officer or first appellate authority; the assessee later produced a receipt in the paper book which required verification. The Tribunal did not decide the factual question on merits but directed that the assessee file evidence before the assessing officer for verification and directed the assessing officer to examine the evidence and pass appropriate order in accordance with law.

Conclusion: Matter remitted to the assessing officer for verification of documentary evidence and fresh adjudication; decision reserved to assessing officer after verification (in favour of neither party at Tribunal level; remand directing further enquiry).

Issue (ii): Correctness of disallowance of claimed indexed cost of acquisition/construction for Bangalore property (Amos-5).

Analysis: The Tribunal observed that no details to substantiate actual indexed cost were furnished before the assessing officer or CIT(A), and that there were discrepancies in declared sale consideration versus agreement value. The Tribunal therefore restored the ground to the file of the assessing officer and directed the assessee to submit required details and evidence so that the assessing officer may determine indexed cost in accordance with law.

Conclusion: Ground restored to the assessing officer for determination of indexed cost of acquisition after considering submissions and evidence (remand favourable to assessee for further consideration).

Issue (iii): Availability of exemption under Section 54 where new residential property was purchased in the name of the assessee's wife and son.

Analysis: Tribunal examined precedents including decisions of the Delhi and Madras High Courts and various Tribunal orders, and considered the binding precedent of the Jurisdictional Bombay High Court in Prakash v. ITO. The Tribunal held that the Bombay High Court's ratio requiring the new residential property to be in the name of the assessee for claiming exemption under Section 54 is binding on the bench and is distinguishable from authorities permitting the spouse's-name purchases in other jurisdictions; applying the jurisdictional precedent the Tribunal ruled against the assessee.

Conclusion: Exemption under Section 54 denied because the new properties were not purchased in the name of the assessee (in favour of Revenue).

Final Conclusion: The appeal is partly allowed: matters concerning proof of cost of improvement/brokerage and determination of indexed cost for the Bangalore property are remitted to the assessing officer for verification and fresh adjudication, while the claim for exemption under Section 54 is rejected following the binding jurisdictional precedent.

Ratio Decidendi: Where a binding decision of the jurisdictional High Court holds that, for claiming exemption under Section 54 of the Income-tax Act, 1961, the new residential property must be in the name of the assessee, that precedent governs and requires denial of exemption if the property is not in the assessee's name; factual claims as to payment source or relationship do not override the jurisdictional binding precedent.

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