1991 (4) TMI 188

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.... (P.) Ltd., Jaipur, share income from five partnership firms and income from interest on deposits. The question involved in this appeal relates to the exemption from capital gains claimed by the assessee under section 54F of the Income-tax Act, 1961. During the accounting period relevant to the assessment year in question, the assessee sold 800 shares of M/s. Sangam Exhibitors Pvt. Ltd., New Delhi to three parties for Rs. 2,80,000 and earned a net capital gain of Rs. 2 lakhs. The assessee had purchased on 9-1-1984 jointly along with his wife Smt. Santosh Mukhija and father Shri Jaswant Ram Mukhija 3 bighas and 3 biswas (1 Bigha = 3025 s.yd.) of land for a sum of Rs. 45,000 on Pansal House Road, near Industrial area, Bhilwara. The report dat....

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....he assessee was living with his parents in the house belonging to his father. He also enclosed copies of the site plan of the house. Lastly it was said that there was no bar to the construction of the residential house on the agricultural land and that moreover the assessee had applied for its conversion and paid the conversion charges though he had not received any orders. It was also claimed that "no objection" from the UIT had been obtained for its conversion. However, the Income-tax Officer took the view that the construction was not a residential house but only a swimming pool with small supplementary construction to use the swimming pool for picnic parties. The deduction claimed was accordingly disallowed. 3. In appeal, the learned C....

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....vidence that there was any farm in existence. The assessee had paid Rs. 7560 on 7-4-1984 as conversion charges. He again paid Rs. 4200 as development charges before the UIT, Bhilwara on 26-5-1984. The expression 'residential house' used in section 54F has not been defined. The popular meaning of the word 'house' is a place or building used for habitation of man. "Residential house" is a dwelling house as distinct from a house of business, warehouse, office, shop, etc. In other words, residential house is a building used as a place of abode in which people reside or dwell in contra-distinction to one which is used for commercial or business purposes. A farm house is also a residential house. Therefore, the Income-tax Officer could not take t....