Disallowance of exemption claimed u/s54 of the ITAct,1961.

[Avinash Joshi]

Assessee has claimed exemption u/s 54 of the ITAct,1961, by investing ₹1crore in a residential flat developed by the developer on the sold residential house property wherein the Assessee had 20%undivided share .The Long term capital gain on transfer of house property thus invested in residential flat allotted by the developer.The learned Assessing Officer has refused exemption u/s 54 on the contention that the Assessee was not absolute owner of the house property sold to the developer.In his opinion the exemption is not available to the coowner of house property. This is a new concept for me.Kindly share your views.

AI Summary

Exemption Denied Under Section 54: Co-Owner Status Challenges Tax Break on Residential Flat Investment An individual sought advice on a forum regarding the disallowance of an exemption claimed under Section 54 of the Income Tax Act, 1961. The individual had invested 1 crore in a residential flat after selling a property in which they held a 20% undivided share. The Assessing Officer denied the exemption, arguing that the individual was not the absolute owner of the sold property, thus ineligible for the exemption as a co-owner. The individual expressed unfamiliarity with this interpretation and requested insights from others.