2005 (9) TMI 635

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....ction 54F by investing the same in purchase of residential flats at Vashi, Navi Mumbai. In the course of assessment proceedings, it was noticed by the Assessing Officer that assessee was co-owner of a flat in Sion (West), Mumbai. Accordingly, assessee was asked to explain as to why exemption under section 54F be not denied. In reply, the assessee contended that he was not an independent owner of the house and exemption can be denied only where assessee is absolute owner of the house. He also filed details of purchase of the house which showed that he along with his wife had purchased the house on 13-4-1994 for a total consideration of Rs. 3,05,000 out of which assessee had invested Rs. 1,60,000 and balance amount was invested by his wife. T....

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....h shares are not defined in the present case and as such, no part of house can be said to be owned by assessee. It is a case of joint ownership where income chargeable to tax has to be assessed in the status of A.O.P. only. In support of his arguments, he relied on various judgments as 216 ITR 367 (sic) (Bom.), CIT v. P.V. Narasimhan [1990] 181 ITR 1011 (Mad.), B.B. Sarkar v. CIT [1981] 132 ITR 150 2 (Cal.) and CIT v. Laxmidas Devidas [1937] 5 ITR 584 (Bom.). On the other hand, the Learned Departmental Representative has relied on the order of the Assessing Officer. 6. Rival submissions have been considered carefully. The question for our consideration is whether, on facts, assessee can be said to be the owner of the residential house vi....

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....l unit, none of the co-owners can claim that he is the owner of residential house. Ownership of a residential house, in our opinion, means ownership to the exclusion of all others. Therefore, where a house is jointly owned by two or more persons, none of them can be said to be the owner of that house. This view of ours is fortified by the judgment of the Hon'ble Supreme Court in the case of Seth Banarsi Dass Gupta v. CIT [1987] 166 ITR 7833, wherein, it was held that a fractional ownership was not sufficient for claiming even fractional depreciation under section 32 of the Act. Because of this judgment, the Legislature had to amend the provisions of section 32 with effect from 1-4-1997 by using the expression "owned wholly or partly". So, t....