2015 (5) TMI 888

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....f the case are simple and largely undisputed, so that it is only a question of the application or otherwise of the relevant provision of law to the facts of the case. The assessee, a co-owner (along with her spouse, Shri Ashok Vishindas Ajwani) of a residential property, being Flat No. 1401, Mount Everest, CHS, Bhakti Park, Wadala (E), Mumbai, transferred her capital asset in the form of a shop at Sion for a consideration of Rs. 85 lacs, disclosing a capital gain of Rs. 83,25,400/-, which was claimed exempt as under: - u/s. 54F: Rs. 26 lacs - amount deposited in capital gain scheme account u/s.54E: Rs. 63.60 lacs Exemption u/s.54F was in respect of purchase of residential flat at Andheri on 24.03.2009 for a consideration of Rs. 1,2....

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....red, so that the assessee-transferor would deemed to be the owner of the residential house and, thus, continue to be considered as its 'owner' in the eyes of the law. The assessee argued that the provision of section 27 was only for the limited purpose of Chapter IV-C, i.e., sections 22 to 26, did not find acceptance with the ld. CIT(A), who confirmed the disallowance of the assessee's claim u/s. 54F, relying on the decision in the case of G. K. Shetty vs. ITO [2008] 112 ITD 103 (298 ITR (AT) 49 (Pune)/copy on record). Aggrieved, the assessee is in second appeal. 3. Before us, the assessee's case remained the same. In addition, the Authorized Representative (AR) relied on the decision in ITO vs. Rasiklal N. Satra [2006] 98 ITD 335 (Mum).....

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....ming that the gift to be only a device set up by the assessee to evade tax and, therefore, rightly disregarded by the authorities below. 4. We have heard the parties, and perused the material on record. 4.1 We may to begin by reproducing section 54F in its relevant part: 'Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house. 54F. (1) Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one ye....

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....ad "Income from house property". Explanation.-For the purposes of this section,- "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, ..... (3) Where the new asset is transferred within a period of ...... (4) The amount of the net consideration which is not appropriated...: Provided that if the amount deposited under this sub-section is not utilised....' 4.2 As would be apparent from the foregoing narration of the facts, which are undisputed, as well as the respectiv....

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....ur mind would be a contradiction in terms, making the law internally inconsistent. The apex court, as far back as in R. B. Jodha Mal Kuthiala vs. CIT [1971] 82 ITR 570 (SC), clarified that the owner is a person who can exercise the rights of an owner, i.e., not on behalf of another, but in his own right. The same, though rendered in the context of section 22, in our view, would continue to be a guide post where the law seeks to grant some benefit or right to an owner or with reference to ownership, of-course keeping the relevant provisions in view, as sec. 27(i). 4.3 With this background, we may proceed to apply the law to the issue at hand. We find no provision in law for the assessee to continue to be regarded as the owner or even a pa....

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....aw with regard to the ownership pattern, or its quantification, i.e., of the assessee's other family members, including spouse, or even of the transferee/s. The same clearly provides for consideration of the ownership of residential house/s only of the assessee, and on a particular date. 4.4 We may finally discuss the reliance by the ld. CIT(A) on the decision in the case of CIT v. Maharaj Kumar Kamal Singh [1973] 89 ITR 1 (SC). The same, in our view, is clearly misplaced. As explained by the hon'ble apex court therein, section 27(ii) of the Act takes place of section 9(4)(a) of the Income Tax Act, 1922, i.e., under which Act the said decision was rendered, merely making explicit what was implied in section 9(4)(a), so that it does not a....