2005 (11) TMI 43 - HC - Income Tax

Sale of house capital gain - Tribunal held that the execution of four different sale deeds in respect of four different portions of the property did not materially affect the nature of the transaction or the nature of the property acquired since the property in question was being used by the assessee for her own purposes and investment made in the purchase of the same was therefore eligible for deduction under section 54 - In the light of the above finding of fact recorded by the Tribunal no question of law much less a substantial question of law arises for our consideration in this appeal

Summary

Issues:
1. Eligibility for benefit under section 54 for capital gains reinvestment.
2. Interpretation of property purchase as a single unit for deduction.

Analysis:
1. The case involved the sale of a property and reinvestment of capital gains in another property, with the assessee claiming benefit under section 54. The Assessing Officer initially declined the deduction, alleging the sale transaction was only on paper. The Commissioner of Income-tax (Appeals) upheld the disallowance, stating the property purchased comprised two distinct units. However, the Tribunal reversed this decision, finding that the property purchased was a single unit used for residential purposes. The Tribunal emphasized that the execution of four sale deeds did not change the nature of the property, making it eligible for deduction under section 54.

2. The Tribunal's detailed analysis highlighted that despite the property being purchased from two different persons through four sale instances, it constituted one single residential unit. The assessee provided conclusive evidence of continuous residential use, residing there with family. The Tribunal noted that the Department failed to rebut this evidence, concluding that the property met the requirements under section 54. The Tribunal criticized the previous restriction imposed by the Commissioner of Income-tax (Appeals), emphasizing that the purchase should not have been treated as separate properties. The Tribunal dismissed the appeal, stating no substantial question of law arose based on the factual findings.

In conclusion, the judgment affirmed the assessee's entitlement to deduction under section 54, emphasizing the continuous residential use of the property as a single unit despite multiple sale deeds. The Tribunal's thorough analysis of the evidence led to the dismissal of the appeal, highlighting the lack of legal issues for consideration based on the factual findings.