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TMI Blog1986 (7) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... one year contemplated by s. 54. The ITO had allowed exemption to the assessee under s. 25 of the Act. The commissioner was however of the view that the assessee had not constructed a new residential house as provided under the Act for claiming exemption under s. 54 but had purchased the flat which was registered on 3rd March, 1983 long after the time limit and, therefore, he was not entitled for exemption allowed under s. 54 by the ITO in the assessment of the assessee for the asst. yr. 1981-82. 3. The short point that arises for consideration in this appeal is whether the appellant can be said to have purchased the residential flat within a period of one year after the sale of residential property from which capital gains arose and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be construed liberally and not strictly so as to further the object for which that provision has been made. It was his plea that the Honourable Supreme Court in the case of CIT vs. T.N. Aravinda Reddy (1979) 12 CTR (SC) 423 : (1979) 120 ITR 46 (SC) affirmed the decision of the Honourable Andhra Pradesh High Court in CIT vs. T.N. Arvinda Reddy (1979) 116 ITR 551 (AP) and construed the release by co-owners whereby the assessee therein obtained a release of undivided interest of his brothers in the property, as a transaction of purchase within the meaning of s. 54. He pleaded that if such a liberal construction is adopted for the purpose of effectuating the intention of the legislature, it is reasonable to construe the date of agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the construction company was the owner of the flat. In the circumstances of the case, the condition stipulated in s. 54(1) are not satisfied. 6. As regard the alternative plea of the assessee that these agreement should be construed as agreement for construction, Sri Santhanam contended that such an interpretation is not called for. Sec. 54 contemplates exemption to the assessee and the said section should be strictly construed. He relied on a number of decisions in support of his contention, chief among them being M. Ramanamma vs. CWT (1986) 157 ITR 555 (AP) and Dr. Mrs. Mrudula A. Talwar vs. ITO (1984) 10 ITD 936 (Hyd). 7. We have heard rival submission and perused the records. Copy of the agreement of purchase and copy of the convey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in two years from the date of sale of the residential flat, the conveyance deed was executed and registered by M/s Meridian Construction Company in favour of the assessee and the assessee was put in possession of the property on 3rd March, 1983, the day the sale deed was executed. On all these facts, there is no dispute. 8. The dispute is with regard to the construction that is to be placed on the word 'purchase'. In our view, the expression 'purchase' occurring in s. 54 is not synonymous with 'ownership' or 'transfer' of legal title' whereas in ss. 22 and 45 of the IT Act, which are the charging sections creating tax liability, the words used are 'owner' and 'transferor' and there cannot be legal title. These words are conspicuous by thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir Lordships further observed: "The purpose is plain, the symmetry is simple, the language is plain. Why mutilate the meaning by lexical legalism. We see no stress in the section on 'cash and carry'." 9. In Mrs. Shahzada Begum vs. ITO (1983) 5 ITD 292 (Hyd), Hyderabad Bench 'B' of the Tribunal had to consider whether for purposes of s. 54, date of agreement (to purchase) could be taken as date of purchase and whether the date of registration of sale deed for purchase is relevant or not. The Bench had to further consider whether the word 'purchase' is synonymous with the word 'own'. It was held in that case that the word 'purchase' is not synonymous with the word 'own' and to claim exemption under s. 54, one need not become a complete ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the agreement to sell entered into by the assessee belonged to the assessee or not. The Honourable High Court held that in the absence of a sale deed duly registered conveying the property to the agreement-holders, the property continued to belong to the assessee. In the case before us, we are not concerned with the ownership of the property. 13. Another case relied on by the ld. departmental representative is the case of Dr. (Mrs.) Mrudula A. Talwar vs. ITO (1984) 1 ITD 928 (Hyd). In that case, the issue was whether, where the assessee acquires no interest in land but only a carpet area of a flat, possession of which is to be entered into on completion of construction, it is a case of construction by the assessee and not purchase. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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