Section 54F exemption: a built-up farm house with appurtenant land may qualify as a residential house despite an initial wrong provision reference.

A built-up farm house with boundary wall, tube-well, electricity connection and appurtenant land can qualify as a residential house for section 54F purposes, and the residential unit cannot be artificially severed from its appurtenant land. The exemption claim was also not defeated merely because the assessee initially referred to the wrong provision in the return, since the relief was otherwise admissible on the facts and had been claimed in the computation and during assessment. The result was that the section 54F exemption on the farm house investment was sustained and the departmental challenge failed.

---

---

Issues: Whether the assessee was entitled to exemption under section 54F on investment in a purchased farm house with appurtenant land, and whether the claim could be denied because it was initially described under the wrong exemption provision.

Analysis: The assessment record and purchase deed showed that the acquired property was a built-up farm house with boundary wall, tube-well, electricity connection and land appurtenant thereto, and the property was not shown to be used for any agricultural activity. The Tribunal noted that a farm house can qualify as a residential house for the purposes of section 54F, and that the residential unit cannot be artificially separated from the land appurtenant to it. It also noted that the assessee had claimed exemption in the computation and during assessment, though the return referred to section 54B/54F, and that relief cannot be denied merely because the assessee initially mentioned the wrong provision when the claim is otherwise admissible in law.

Conclusion: The assessee satisfied the conditions for exemption under section 54F, and the deduction could not be denied on the ground of wrong initial reference to section 54B.

Final Conclusion: The departmental appeal failed and the allowance of the assessee's claim for exemption on the residential farm house investment was sustained.

Ratio Decidendi: For section 54F, a built-up farm house with appurtenant land is a residential house, and a legally admissible exemption cannot be refused merely because the assessee initially invoked or mentioned a wrong section.

---