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Issues:
- Dispute over exemption under section 53 of the IT Act for capital gain from the sale of a residential house. Analysis: The appeal by the Revenue was directed against the order of the CIT(A) allowing the benefit of exemption under section 53 of the IT Act for the capital gain arising from the sale of a residential house. The Revenue argued that the assessee, who had another house in Faridabad, was not entitled to the exemption as per the proviso to section 53, which states that the exemption is not available if the assessee owns any other residential house on the date of transfer. The Revenue contended that since the possession of the house in Faridabad was with the assessee, the claim for exemption was rightly rejected by the Assessing Officer (AO). In response, the authorized representative of the assessee argued that the proviso to section 53 only excludes the exemption when the assessee "owns" another residential house. Even though the possession of the house in Faridabad was with the assessee, the ownership still resided with the Haryana Housing Board. A case citation was provided to support this argument. After considering the contentions from both sides and reviewing the relevant material and case law, the tribunal analyzed the term "owns" used in the proviso to section 53 of the IT Act. The tribunal distinguished the situation from cases of part-performance under the Transfer of Property Act, emphasizing that the term "owns" is distinct from "transfer." In this specific case, where the assessee had taken possession of the house in Faridabad on a hire-purchase basis, the tribunal concluded that the ownership still belonged to the Haryana Housing Board and not the assessee. Therefore, the tribunal upheld the decision of the CIT(A) to grant the exemption under section 53 of the IT Act to the assessee, dismissing the Revenue's appeal.
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