9911796707
|
Home
Issues:
1. Entitlement to exemption under section 54 of the Income-tax Act for the assessment year 1982-83. Analysis: The case involved a reference under section 256(1) of the Income-tax Act, 1961, where the Income-tax Appellate Tribunal referred a question of law to the Bombay High Court regarding the assessees' entitlement to exemption under section 54 of the Income-tax Act for the assessment year 1982-83. The assessees, a husband and wife, had purchased a flat in 1981 and resold it in 1982, subsequently purchasing another flat. The Income-tax Officer rejected their claim for exemption under section 54, stating that the flat was not occupied by the assessees as owners for a period of two years, a condition for exemption. The Commissioner of Income-tax (Appeals) also rejected the claim, but the Income-tax Appellate Tribunal accepted it, leading to the reference to the High Court. The High Court considered the facts that the assessees were in occupation of the flat on leave and licence basis and had purchased and resold the flat within a short period. The court referred to a previous case where it was held that exemption under section 54 requires the property to be used mainly for the assessee's own residence in the two years preceding the transfer. The court emphasized that occupation as an owner is crucial for claiming exemption and that occupation during the period when the property did not belong to the assessee does not fulfill the requirement. Therefore, based on the precedent and interpretation of section 54, the court ruled in favor of the Revenue and against the assessee, denying the exemption claim. In conclusion, the High Court answered the question referred to them in the negative, favoring the Revenue and rejecting the assessee's claim for exemption under section 54 of the Income-tax Act for the assessment year 1982-83. The reference was disposed of accordingly with no order as to costs.
|
