TaxTMI 
TaxTMI 
2014 (8) TMI 833
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.... the hands of the assessee. 2.1 Facts of the case, in brief, are that the assessee is a non-resident individual and filed his return of income declaring NIL income on 22-12- 2009. During the course of assessment proceedings the Assessing Officer noted that the assessee in his individual capacity and in capacity as Power of Attorney holder owns 4 flats each registered under separate agreements on 05-05-1993 (Registered on 20-07-1998). He noted that the flats bearing Nos. 602 and 603 were purchased in the name of his father Shri Purushottam T. Bhagwani (second name Smt.Maya P.Bhagwani) and the flats bearing Nos. 601 and 604 were purchased in the name of his mother (Smt.Maya Purushottam (second name Shri Purushottam T. Bhagwani). Each flat ....
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....e to explain as to why the claim of exemption u/s.54 of the Act should not be disallowed. In absence of any satisfactory explanation, the Assessing Officer held that the basic condition for claim of exemption u/s.54 of the Act is defeated since sale of property in question is not chargeable to tax under the head "income from house property". He accordingly rejected the claim of exemption u/s.54 of the I.T. Act. 3. Before the CIT(A) the assessee vehemently objected to the denial of exemption u/s.54. However, the CIT(A) was also not convinced and rejected the contention of the assessee by observing as under : "3.1 Apparently, Assessing Officer's decision of denying exemption u/s.54 seem to be incorrect as exemption provisions are not de....
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....nt) for doing paper work for the sale and purchase of the properties. Shri Purushottam Bhagwani could not file return of income as he was not in India and time expired for the filing the return of income. Therefore, exemption was claimed by the Appellant in his return, who is Power of Attorney holder of Shri Purushottam Bhagwani. 3.5. When asked to explain as to how the Appellant could get an exemption when he did not invest the property sold by him. The learned Representative replied that Appellant has erroneously claimed exemption in his return on receipt of wrong advice from the Tax Consultant in Mumbai. Learned Representative submitted that, Appellant's father, who is a NRI, had purchased residential properties. He could not file....
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....l before us. 4. The Ld. Counsel for the assessee, at the outset, submitted that when the assessee is not the owner of the property, which admittedly belong to his father Shri Purushottam T. Bhagwani, therefore, bringing the long term capital gains to tax in the hands of the assessee is not at all justified. He submitted that due to wrong advice by the Chartered Accountant, the assessee has made the mistake in declaring long term capital gain in his hands and claimed exemption u/s.54. However, the fact remains that the properties in question do not belong to the assessee and belong to his father. Therefore, there is no question of bringing into tax the long term capital gain in the hands of the assessee. Relying on the following decision ....
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....Act and the assessee is not entitled for the claim of exemption u/s.54. 6.1 It is the submission of the Ld. Counsel for the assessee that the flats sold in question do not belong to the assessee and they belong to his father Shri Purushottam Bhagwani and the assessee has erroneously and on wrong advice by the Chartered Accountant, declared the long term capital gain in his hands and claimed exemption u/s.54. We find merit in the above submission of the Ld. Counsel for the assessee. Before the Assessing Officer as well as the CIT(A), it was clearly brought on record that the flats in question do not belong to the assessee and these flats belong to the father of the assessee. It has been held in various decisions that the Assessing Officer....