9911796707
TMI Blog2007 (4) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was already residing. The assessee owned 1/4th share of the residential flat along with three other family members i.e., her husband and parents in law. The assessee along with her husband purchased shares of other two co-owners and accordingly paid ₹ 23,75,000. The balance sum of ₹ 7,50,000 was paid by her husband. The assessee became co-owner of the property along with her husband. The said additional investment in the flat was claimed as new investment made during the year under consideration for the purpose of claiming deduction under Section 54F of the Income Tax Act against income from long-term capital accounts on sale of shares. 4. The claim of the assessee was rejected by the assessing officer observing that as per proviso to Section 54F of Income Tax Act, the said exemption is not available, if the assessee owns on the date of transfer of the original asset, any other asset, in this case share in residential house, the income from which is chargeable to tax under the head 'Income from house property' other than the new asset. As the assessee was already owning a residential house being 1/4th share in Flat No. 505, 5th floor, Udyan Darshan, Saya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing an additional argument taken by the assessing officer. 7. The learned authorised representative for the assessee pointed out that under the pre-amended provisions of Section 54F of the Income Tax Act no exemption is allowable to the assessee against investment in an immovable property if on the date of transfer of asset against which exemption is claimed, the assessee owns any other property. The learned authorised representative further pointed out that on the date of transfer, the assessee was holding 1 /4th share in the same flat and later by investing in the said property by way of purchase of share of father-in-law and mother-in-law along with her husband, she became 76 per cent of the property. The learned authorised representative further relied on the decision in ITO v. Smt. Varsha P. Thanawala [IT Appeal No. 625 (Mum.) of 2002] wherein the claim of deduction under Section 54F on similar facts was allowed though the assessee therein had resided in the same unit prior to the date of purchase. The learned authorised representative further clarified that though the assessee had also acquired another tenanted building in assessment year 1992-93, the same was registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or [two years] after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say, (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain, the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under Section 45: Provided that nothing contained in this sub-section shall apply where the assessee owns on the date of the transfer of the original asset, or purchases, within the period of one year after such date, or contracts, within the period of three years af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was also in possession of property at Khar during the year under consideration and the claim of deduction under Section 54F of the Income Tax Act is to be considered from the angle of the possession of the Khar Property. The assessee acquired a tenanted property consisting of ground floor and four floors at Jaibharat Co-operative Housing Society, Plot No. 24 (North), 3rd Road, Khar, Mumbai-52. It is an admitted claim of the assessee that the payment for the purchase of aforesaid property was made in financial year 1992-93 and the rent in respect of the same was being offered for tax as income from house property since investment was made by her which proves that the possession of the property is with the assessee. The conveyance of the said property was executed and registered on 11-3-1999 and accordingly, the assessee claims that during the year under consideration which is falling before the date of conveyance i.e. 11-3-1999 the assessee was not the owner of any other property except her share in the property at Prabhadevi. 14. Their Lordships of Apex Court in Podar Cement (P.) Ltd's case (supra) had held as under: Hence though under the common law owner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Section 2(47)(v) of the Income Tax Act accordingly provides that where a person receives the possession of immovable property in part performance of the contract of the nature referred to in Section 53A of the Transfer of Property Act, such a person is treated to be the owner of the property as the transfer is deemed to be completed for the purpose of Income Tax Act, though the conveyance of the property by way of registration of the document may take place at a future date. In the facts of the case before us the assessee had paid the sale consideration A for the purchase of flat at Khar, possession of which was handed over to the assessee in financial year 1992-93. The assessee is occupying the said property through its tenants, income of which is being shown and accepted under the head 'Income from property'. Only such income is assessable under the head 'Income from property' where the same is received from such asset of which the assessee is the owner. Accordingly, the ownership of the Khar flat in the hands of the assessee stands established, though the conveyance deed of the property was executed and registered on much later dated i.e. 11-3-1999. 20. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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