2017 (7) TMI 1272 - AT - Income Tax

Deduction u/s 54F - assessee holding more than one residential property - assessee contended that it was holding only one house property in the status of individual and joint ownership in another house - CIT-A allowed the claim - HELD THAT - CIT(A) has granted relief to assessee by placing reliance on many judicial pronouncements where a liberal view has been taken by various courts / authorities as it is well settled that beneficial provisions should be construed liberally. We find that the ratio of decision in Dr. Smt. P. K. Vasanthi Rangarajan Vs. Commissioner of Income Tax Chennai. 2012 (7) TMI 563 - MADRAS HIGH COURT squarely applies to the case of the assessee wherein as clearly held that joint ownership of a property could not be held to stand in assessee s way of claiming exemption u/s 54 of the Act. DR could not point out any contrary decision in revenue s favor. - Decided against revenue

Summary

Issues:
Appeal by Revenue for AY 2011-12 assailing CIT(A) order regarding relief under section 54F of Income Tax Act, 1961.

Analysis:
The appeal concerned the denial of exemption under section 54F to the assessee due to owning more than one residential house at the time of investment. The assessee claimed deduction for LTCG of ?235.58 Lacs by investing in a new residential house while owning one house individually and another jointly. The AO denied the exemption, adding the LTCG to the income. The CIT(A) allowed the claim, citing various judicial pronouncements emphasizing joint ownership not disqualifying the assessee. The revenue contended that owning two properties barred the deduction under section 54F.

The CIT(A) observed that the appellant did not wholly own more than one residential house, as the second property was jointly owned. Judicial decisions were cited to support the assessee's claim, emphasizing the distinction between joint and absolute ownership. The Madras High Court's ruling was pivotal, stating joint ownership does not disqualify an assessee from claiming exemption under section 54. The Tribunal concurred with the CIT(A) and dismissed the revenue's appeal.

The Tribunal noted the liberal interpretation of beneficial provisions and upheld the CIT(A)'s decision based on precedents favoring the assessee. The Madras High Court's ruling was deemed applicable, affirming that joint ownership does not hinder an assessee from claiming exemption under section 54. The revenue failed to provide contradictory decisions, leading to the confirmation of the CIT(A)'s order. Consequently, the revenue's appeal was dismissed.