TaxTMI 
TaxTMI 
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.
Disallowance of exemption claimed u/s54 of the ITAct,1961.
23 Apr 2015 
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Exemption under section 54 questioned where co owner invests sale proceeds in a developer allotted residential flat.
The assessee, holding a 20% undivided share in a sold residential house, invested sale proceeds in a residential flat allotted by the developer and claimed exemption under section 54 for long term capital gains. The Assessing Officer denied the exemption on the ground that the assessee was not the absolute owner and therefore, in the AO's view, a co owner cannot claim the benefit; the issue posed is whether a co owner who invests in an allotted flat meets the ownership and investment conditions for the exemption. (AI Summary)
The assessee, holding a 20% undivided share in a sold residential house, invested sale proceeds in a residential flat allotted by the developer and claimed exemption under section 54 for long term capital gains. The Assessing Officer denied the exemption on the ground that the assessee was not the absolute owner and therefore, in the AO's view, a co owner cannot claim the benefit; the issue posed is whether a co owner who invests in an allotted flat meets the ownership and investment conditions for the exemption. (AI Summary)