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TMI Blog2005 (2) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... nal was justified in law in holding that the conditions as prescribed under section 54(1) of the Income-tax Act were not fulfilled in the assessee's case and thus he was liable to capital gains - - - - - Dated:- 3-2-2005 - Judge(s) : R. K. AGRAWAL., PRAKASH KRISHNA. JUDGMENT The Income-tax Appellate Tribunal, Allahabad, has referred the following questions of law under section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for the opinion of this court: "1. Whether, on the facts and circumstances to the case, the Tribunal was justified in law in holding that the conditions as prescribed under section 54(1) of the Income-tax Act were not fulfilled in the assessee's case and thus he was liable to capital g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather and the applicant himself, respectively and, therefore, section 54(1) of the Act would not be attracted. The Assessing Officer was, however, of the view that the land in question was not appurtenant to the residential house being nearly 300 ft. away from the building. He also noticed that the major part of the residential house has been converted into a hotel with effect from February, 1976, and therefore, the income from the building was not assessable as income from house property. Feeling aggrieved the applicant preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) has upheld the order of the assessing authority. He had found that the applicant's father died on December 12, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appurtenant thereto as defined in section 5(1)(ivc) of the Wealth-tax Act. Though we are concerned with the income-tax matters yet in the absence of a corresponding definition in the Income-tax Act, we are of the view that it would be permissible to adopt the same connotation and significance of the word 'appurtenant to' as spelt out in the Wealth-tax Act. It is seen that enjoyment, easement, etc. of the old residential building could be made even without the extra land which was sold, as otherwise if the above land is appurtenant to the old residential house, which cannot be enjoyed without that extra land then the land itself would not have been sold at the first instance. That apart, as pointed out by the Commissioner of Income-tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Smt. D. Rani [1996] 218 ITR 724 (AP); and (9) Unreported decision of this court in Wealth-tax Reference No. 17 of 1988 CWT v. Masood Halim-since reported in [2005] 275 ITR 14 (All), decided on October 1, 2004. Learned standing counsel submitted that for the applicability of section 54(1) of the Act the land which is claimed to be appurtenant and the building in which either the applicant or his father is residing should belong to the same person. If the ownership is different the provisions of section 54(1) of the Act cannot be invoked and, therefore, the Tribunal has rightly not accepted the claim of exemption under section 54(1) of the Act. After hearing learned counsel for the parties, we find that it is not in dispute that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to say,- (i) if the amount of the capital gain is greater than the cost of the house property so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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