1991 (4) TMI 188 - AT - Income Tax

Summary

Issues Involved:
The judgment involves the issue of exemption from capital gains claimed by the assessee u/s 54F of the Income-tax Act, 1961.

Details of the Judgment:

Issue 1: Exemption from Capital Gains
The assessee, an individual deriving income from various sources, claimed exemption from capital gains u/s 54F. The dispute arose when the Income-tax Officer proposed to disallow the exemption, arguing that the property in question was not a residential house but a farm house. The Income-tax Inspector's report supported this claim. However, the assessee contended that the property was indeed a residential house constructed for personal use, with supporting documents and explanations. The Income-tax Officer disallowed the deduction, a decision upheld by the Commissioner (Appeals).

Decision:
The Tribunal considered the purpose of the property and the definition of a residential house. It noted that the property, despite having a swimming pool, was a complete unit suitable for residence. As there was no prohibition on constructing a residential house on agricultural land, the Tribunal held that the assessee was entitled to the deduction u/s 54F. The Assessing Officer was directed to consider the capital gains assessment with the allowable exemption.

Result:
The appeal filed by the assessee was allowed, granting the exemption from capital gains u/s 54F.