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TMI Blog2013 (8) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... deductibility of Rs.25.00 lacs, which was paid to the tenant as compensation. This fact itself has established that the property of the assessee was occupied by the tenant. The requirement of section 54 is that the income of the building which is being sold should be chargeable under the head "income from house property". The requirement of section is not that the assessee must earn income from said property. If there was a tenant then the income from the property was chargeable to tax. Therefore, exemption also cannot be denied to the assessee on the ground that assessee did not show any income chargeable under the head income from house property - Decided in favour of assessee. - ITA No.4068/MUM/2012 - - - Dated:- 8-7-2013 - Shri I. P. Bansal, JM And Shri N. K. Billaiya, AM,JJ. For the Appellant : Shri K. R. Lakhshminarayan For the Respondent : Shri Rajendra Kumar ORDER Per I. P. Bansal, J. M:- This is an appeal filed by the assessee. It is directed against the order dated 03/04/2012 passed by Ld. CIT(A)-23, Mumbai for the assessment year 2004-05. The grounds of appeal read as under: "1. The order passed by the learned CIT (A) is bad in law. 2. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 29/11/2007, copy of which is field at pages 5 to 12 of the paper books. The revenue has field appeal against that order and matter was restored back to the file of AO by the Tribunal vide order dated 12/3/2010 in ITA No.889/Mum/2009. It may also be mentioned here that the husband of the assessee owns remaining 50% share in the property which sold by the assessee and similar capital gain was also assessed in the hands of husband of the assessee on which exemption under section 54 was also granted. However, exemption was denied to the assessee by the AO. The revenue has filed an appeal before ITAT in the case of assessee as well as her husband and vide aforementioned order dated 12/3/2010. The Tribunal has decided both the appeals of the revenue by way of consolidated order. With regard to assessee's appeal the issue regarding grant of exemption u/s.54 was restored back to the file of AO with the following observations. "2.2.1 We have heard both the parties perused the records considered the matter carefully. The dispute is regarding allowability of deduction u/s 54 in respect of capital gain arising from sale of residential house. The Assessing Officer disallowed the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, therefore, restore the issue to the file of the Assessing Officer for passing a fresh order after necessary examination of evidences produced before the CIT (A) and after allowing the opportunity to the assessee." 5. It is in pursuance of aforementioned order of the Tribunal the impugned assessment has been framed which an order dated 30/12/2010. Before AO the AO the assessee filed various evidences with regard to a sum of Rs.25.00 and the AO has referred to those evidences in para-8, which is reproduced below:- "8.The assessee's representative Shri Vasu Harwani, CA attended and filed his submissions as per letter dated 18/10/2010. He filed copy of tenancy agreement dated 16/9/1969 as per which Mr. Ramesh Nichlani and M/s. Ralhan Productions to whom flat was sub leased and also copy of affidavit filed by Shri Ramesh Nichlani before Small Cause Court in Suit No.975/3248 of 1979 which was filed against M/s.Ralhan Productions. Further assessee also filed copy of agreement dated 3/12/1973 between him and his wife as per which they agreed to construct house property on plot of land owned by assessee's wife. The said ground also contains recital to the effect that in case property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party of one part owns plot of land admeasuring 660 sq. yards bearing plot No.671 of , Bandra,Bombay. The assessee and her husband had agreed to construct a residential house consisting of ground and two upper floor on the said plot of land and the house consisting of the said plot of land together with structure thereon is indented to be held jointly in equal proportion by the assessee and her husband. The husband of the assessee has contributed all the funds for construction of the residential building thereon. The said recital is reproduced below for the sake of convenience: "WHEREAS: a) Mrs. Sheela of the One Part owns a plot of land admeasuring 660 sq. yards bearing Plot No.671, TPS-III of Bandra, Bombay (hereinafter referred to as the said Plot of Land). b) Mr. Bhagwands is the Husband of the said Mrs. Sheela. c) Both the parties hereto had agreed to construct a residential house consisting of Ground and Two upper floors on the said Plot of land. d) The House consisting of the said Plot of land together with structure thereon is intended to be held jointly in equal proportion by Smt. Sheet and the said Shri Bhagwandas. e) Smt. Sheela's contribution is the said Pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso assessee could not prove that any income was derived by the assessee which was assessable under the head income from house property. Therefore, Ld. DR pleaded that the claim of the assessee has rightly been rejected by Ld. CIT(A) and the appeal filed by the assessee should be dismissed. 10. We have carefully considered the rival submissions in the light of material placed before us. It is undisputed that assessee is owner of the land upon which building was constructed by the funds made available by the husband of the assessee in pursuance to an agreement dated 3/12/1973. The relevant clauses of the said agreement have been reproduced above. If the terms of aforementioned agreement are kept in mind then it cannot be said that assessee was not owner of the building which was sold by her. Upon the basis of aforementioned agreement revenue has assessed the husband of the assessee and has computed long term capital gain on 50% of the sale proceeds and exemption has also been granted under section 54. The case of the assessee is on sound footing as assessee is owner of the land itself. Therefore, the claim of the assessee has wrongly been rejected for the reason that assessee is n ..... 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