TaxTMI 
TaxTMI 
2013 (9) TMI 568
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs. 1,12,28,000/- were claimed as exempt u/s. 54F (CGS), while Rs. 25,00,000/- u/s. 54EC (REC). Evidence and details in respect of the said investments were filed by the assessee. During the course of assessment proceedings, it was observed that the assessee had shown income from 'House property' in her e-return, in respect of the following properties: (i) Property at 204, Meenakshi Royal Court, Road No. 11, Banjara Hills, Hyderabad. (ii) Property at 301, My Home Navadeep, Madhapur, Hyderabad. 4. From the above, the Assessing Officer noted that the assessee owned more than 2 houses. He noted that as per the provisions of sec. 54F, exemption is not available where the assessee owns more than 1 residential house, other than the new asset, on the date of transfer of original asset. It was noted that the date of transfer of shares in the case of the assessee was between April, 2007 to November, 2007. As on the date of transfer of shares, however, the assessee owned more than one house. The Assessing Officer, therefore, required the assessee to explain as to why her claim of exemption u/s. 54F should not be disallowed. 5. In response, the assessee furnished a copy of the Gif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ver of possession of the property (v) Mutation of the property in Municipal records by the donee ID his name. 8. The Assessing Officer noted that in the assessee's case there was no execution of the Gift deed, payment of stamp duty and registration of the property. Besides, possession of the property had also not been handed over to the minor son. In addition to this, the computation of total income showed that the property was self occupied and was in possession of the assessee only. The Assessing Officer verified from the web site of the Greater Hyderabad Municipality Corporation also and found that the assessee had been shown as owner thereof, having tax dues of Rs. 8358/- as on April, 2010, even though the same was claimed as gifted to her son. The Assessing Officer noted that the effect of non registration of documents is that the same cannot be adopted or received as evidence of any transaction affecting such property. Accordingly, the Assessing Officer concluded that the so called gift is not a valid gift and therefore, it does not exist in the eyes of law. He noted that the assessee had transferred the shares of Nandan Bio Matrix on 2.4.2007 itself, the date on which ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that in the case of CIT Vs. Chandanben Madanlal (245 ITR 182) (Guj), it was held that purchase of a share in the residential house is equivalent to purchase of residential house for the purpose of sec. 54. Accordingly, he opined that in view of the said decision also, share in a residential property is equivalent to one house. Accordingly, concluding that the assessee was owning more than 2 houses as on the date of transfer of shares, the Assessing Officer held that the assessee was not eligible for exemption u/s. 54F of the Act. Against this, the assessee went in appeal before the CIT(A). 13. Before the CIT(A) the assessee reiterated that a share in the joint property should be regarded as a share only and not as a single individual ownership. It was averred that the Assessing Officer did not consider the legal position standing as on date. It was contended that the assessee's case is clearly covered by the decisions, such as those in ITO vs. Rasiklal Satra (supra) and in Seth Banarsi Dass Gupta vs. CIT (81 ITR 170) (All), SB Sugar Mills Ltd. vs. CIT (166 ITR 783) (SC). It was averred that as per the judgement of the Apex Court, a co-owner means a person entitled to a share in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tity. In the absence of registration of the gift and attestation thereof' by two witnesses, the rights of the owner cannot be considered as transferred in favour of the so-called 'donee'. Besides, it is seen that the so called "gift deed" is claimed as executed only on the date of transfer of shares of Nandan Bio Matrix by the assessee. It is also seen that while the assessee did not pay any stamp duty towards this nor she got the property registered later, even the stamp papers used by the assessee for the same were those purchased by the personnel of Nandan Bio Matrix Ltd. itself on 14.3.2005 for business purpose. Under the circumstances, it is clear that the entire arrangement of "Gift" is only an afterthought, put on record only with a view to show that the assessee was owning only one house as on the date of transfer of shares. 18. The CIT(A) observed with regard to the deeming fiction created by Sec. 27 of the Act, it is true that the same has been prescribed in the context of computation of income from house property, however, it is clear that the provisions of sec. 54F have been enacted with a view to give fillip to the Housing Sector only. Therefore, in order to decide ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is partly owned by one person or partly owned by other person(s). The Tribunal felt that after the aforesaid decision of the Supreme Court, the Legislature could have amended the provisions of sec. 54F to include part ownership. However, since the same is not done, it was to be held that the word "own" in sec. 54 F would include only the case where a residential house is fully and wholly owned by the assessee and not one owned by more than one person. 21. The CIT(A) observed that while it may be true that the said decision of the Tribunal Mumbai Benches in the case of Rasiklal N. Satra (supra) was not contested further, it is also seen that the Chennai Bench of the Tribunal in a recent decision in the case of ACIT Vs. K. Surendra Kumar in ITA No. 1324/Mds/2010 dated 12.8.2011 have followed the same decision. Going against the decision of their Co-ordinate Bench in the case of Dr. P.K. Vasanthi Rangarajan (supra), the Tribunal noted that the decision of the Supreme Court in the case of Seth Banarasi Dass Gupta (supra) had not been considered by them, whereas the same was considered in the decision in the case of Rasiklal N. Satra (supra) by the Tribunal Mumbai Benches. Since in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the property and she cannot granted deduction u/s. 54F of the Act. For this proposition, he relied on the following judgements: i) CIT vs. Ravinder Kumar Arora (342 ITR 38) (Del) - In that case the assessee has purchased a new residential house along with his wife. The AO granted deduction u/s. 54F to the extent of 50% as per the assessee's share in the property. On further appeal, the Tribunal as well as the High Court held that the assessee is entitled for full exemption u/s. 54F of the Act and the Assessing Officer was not justified in restricting the exemption to the extent of 50% of the amount invested in the new residential house. ii) Mrs. Kamlesh Bansal vs. ITO (109 TTJ 417) wherein it is held that the assessee investing capital gain in construction of a residential house on the land owned by her husband and under agreement having 50% share therein was eligible for exemption u/s. 54F not- withstanding absence of registered deed in hear favour. iii) Further, he relied on the judgement of Calcutta High Court in the case of Madgual Udyog vs. CIT (184 ITR 484). He also relied on the order of the Tribunal inthe case of DCIT vs. M/s. Greenko Energies Pvt. Ltd. in ITA Nos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ents are not applicable to the facts of the case. 28. We have heard both the parties and perused the material on record. Exemption u/s. 54F has been granted to the assessee with a view to encourage construction of one residential house. The construction/purchase of a house other than one residential house is not covered by section 54F of the Act. The concession provided u/s. 54F w.e.f. 1.4.2001 would not be available in a case where the assessee already owns, on the date of transfer of the original assets, more than one residential house. Therefore, it is clear that emphasis has been given on owning more than one residential house by any assessee. The assessees, who already owns, on the date of transfer of the original asset, more than one residential house, are not eligible for the concession provided u/s. 54F of the Act. Even if other residential house may be either owned by the assessee wholly or partially. Therefore, the concession has been given only to encourage that any assessee should have his own residential house. In other words, when any assessee who owns more than one residential in his/her own title exercising such dominion over the residential house as would enable....