1985 (6) TMI 29

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....ned area of the first and second floors is 380 sq. yards. The assessee leased out the ground floor and used the first and second floors for personal residence. The assessee claimed reduction of Rs. 57,680 under s. 54 of the I.T. Act, 1961, on the plea that part of the capital gains in respect of the sale of Veraval property was used for construction of a new residential property. The ITO rejected the assessee's claim. In appeal, the AAC allowed the claim of the assessee since in his opinion s. 54 did not provide that the new house property should be exclusively used for residential purposes of the assessee. In so concluding, the AAC relied on the decision of this court in CIT v. Tikyomal Jasanmal [1971] 82 ITR 95. The Revenue carried the....

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....tory period of two years from the date of the sale of the old house property, the first condition prescribed in s. 54 for claiming exemption from the liability to capital gains was satisfied. The Division Bench, however, having regard to the fact that a substantial portion of the ground floor had been let out, held on the facts of the case, that the assessee before the Division Bench had not constructed the house property for the purposes of his own residence. In CIT v. Natu Hansraj [1976] 105 ITR 43 (Guj), the Division Bench consisting of Divan C.J. and P. D. Desai J. (as they then were) was concerned with the question as to whether the assessee who had occupied about 3/4th portion of a newly purchased house property and let out the rem....

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....ediately or within reasonable time after his purchase or construction, it would ordinarily provide a clue that the acquired new property was really and substantially meant for purposes of the residence of the assessee, and to that extent that circumstance may be relevant and useful as a subsidiary test. The Division Bench also emphasised the third aspect in this behalf that the question has to be decided in each case on an integrated view of all the relevant circumstances, and the predominant intention of the assessee in purchasing the new property which is to be ascertained on an overall consideration of the material facts. In view of the above settled legal position, it would be difficult to assail the view of the Tribunal when it appl....