TaxTMI 
TaxTMI 
2004 (3) TMI 322
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....rchasers were three, i.e., assessee, her mother and father. Assessing Officer was of the view that the word 'purchase' is not defined in the Income-tax Act and, relying on various observations, held that there were three purchasers of the property. Consequently, the assessee was only 1/3rd purchaser. Benefit of section 54 was worked out accordingly. The assessee preferred first appeal where the assessee contended that the assessee was the only purchaser of the property. The entire sale consideration was paid out of her bank accounts, evidence whereof was submitted before the Assessing Officer. The names of mother and father were included for convenience to avoid court litigation on death of any party. The actual owner was the assessee, who was shown as No. 1 as the purchaser. The money received from the sale of the property was deposited in the bank and the entire amount utilised for purchase of new property was spent therefrom. The payment of legal fee, stamp duty, brokerage etc. was also made from the same account by the assessee. Affidavits of father and mother of the assessee were filed deposing that the assessee had utilised all her own funds for purchase of new flat and mothe....
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....l your house and make a profit, pay Caesar what is due to him. But if you by or build another subject to the conditions of section 54(1) you are exempt. The purpose is plain; the symmetry is simple, the language is plain. Why mutilate the meaning by lexical legalism." Under these circumstances, it was contended that in the facts of the case assessee is the only purchaser of the property. She has paid the consideration along with all the expenditure. Further reliance was placed on section 45 of the Transfer of Property Act and the commentary about co-owners' interest, which is as under: "45. Joint transfer for consideration.- Where immovable property is transferred for consideration to two or more persons and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interests in such pro....
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....6 ITR 625 for the proposition that the concept of "constructive ownership" is very well recognized in the income-tax proceedings. 5. We have heard the rival submissions and perused the material available on record. The facts of the case have been elaborately discussed above. The term 'purchase' is not defined in the Income-tax Act. Therefore the same is to be understood as in common parlance. It is evident that the assessee paid the entire purchase consideration together with all the expenses. The mother and father have deposed that they have no right, title or interest in the impugned flat and that their names have been added for various legal conveniences mentioned above. Section 45 of the Transfer of Property Act is discussed above, which gives importance to the ratio of payment made by respective owners and refers to any contract to the contrary, which may be in existence. As the facts emerge, it is implicitly clear from the conduct of the parties that there was an agreement in existence that the flat will be the property of the assessee and mother and father will have no right, title or interest therein and the purchase consideration with expenses will be borne by the asses....
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....st of the new asset. The Tribunal had perused the items of the report of the architect. The residential house was in a state of general disrepair and was unhabitable. Consequently, the necessary repairs carried out to make the same habitable would constitute part of the cost of new house. The Commissioner (Appeals) was not justified in enhancing the assessment by excluding the amount of Rs. 14,94,359 while working out deduction under section 54. The enhancement, was, therefore, deleted." It was contended that the assessee furnished all the details about the repairs of the new flat before occupation to the lower authorities contending that the flat purchased was not occupied by the previous owner but was let out from time to time, due to which the same was left in a bad condition. The assessee had to carry out extensive repairs, including replacement of flooring, electrical work and carpentry work etc. so that the flat could be in a proper saleable condition. The bathrooms were leaking, electrical wirings were sub-standard and dangerous, painting was slipshod and there were signs of white ants eating into walls and woodwork of the apartment. The amount spent was on extensive repa....