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TMI Blog2018 (2) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal:- "1(a). On the facts and in the circumstances of the case, the ld. CIT(A) erred in directing the AO to allow the exemption claimed by the assessee under section 54F without appreciating the fact that the assessee was already the beneficial owner and co-owner of two properties on the date of transfer of the original asset i.e. tenancy rights in 'Sylverton Building'. 1(b). On the facts and in the circumstances of the case, the Ld. CIT(A) failed to appreciate that the proviso to section 54F(1) stipulates that the provisions of section 54F(1) shall not apply where the assessee owns more than one residential house, other than the new asset, on the date of transfer of the original asset. 1(c). On the facts and in the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere from was claimed by him as exempt under Sec. 54F of the Act. The A.O being of the view that as the assessee at the time of purchase of the new residential property, i.e. flat from Oberoi Constructions, owned more than one house property, therefore, he stood disentitled for claim of deduction under Sec. 54F of the Act. The assessee in order to dispel the doubts raised by the A.O as regards the entitlement of the assessee towards deduction under Sec. 54F, supported his claim primarily on three grounds, viz. (i) that both the properties, i.e. Tara Manzil and Noor Manzil were commercial properties; (ii) that as the share of ownership of the assessee in the respective properties, i.e. Tara Manzil and Noor Manzil was 25% and 20%, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y entitled for claim of deduction under Sec. 54F as raised by him in his return of income. 5. The revenue being aggrieved with the order the CIT(A) had carried the matter in appeal before us. The Learned Authorized Representative (for short 'A.R') for the assessee Mr. Nitesh Joshi took us through the relevant observations of the lower authorities. The Ld. A.R. submitted that the claim of deduction raised by the assessee under Sec. 54F was well in order and had wrongly been dislodged by the A.O. It was submitted by Mr. Joshi that as both of the properties owned by the assessee i.e. Tara Manzil and Noor Manzil were commercial properties, therefore, the proviso of Sec. 54F(1) which contemplates ownership of more than one residential house, wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndour, Building No.1, 'C' Wing, Mumbai. The A.O while framing the assessment held a conviction that as the assessee on the date of purchasing the new residential property, viz. Oberoi Splendour, owned two house properties, i.e. Tara Manzil and Noor Manzil, therefore, the assessee as per proviso of Sec. 54F(1) was disqualified for claiming the deduction under the said statutory provision. We have deliberated at length on the observations of the CIT(A) and find that he had observed that the two house properties, i.e. Tara Manzil and Noor Manzil which were owned by the assessee before purchase of the new property from Oberoi Constructions, were commercial properties and not residential properties. We find that nothing has been placed on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l ownership in the aforementioned properties, i.e. 25% in Tara Manzil and 20% in Noor Manzil, therefore, it can safely be concluded that the assessee was not the owner of more than one residential house on the aforesaid relevant date. We may herein observe that the term owns more than one residential house used in the proviso of Sec. 54F(1) has to be strictly construed and accorded its literal meaning, which thus would not bring within its sweep a partial and fractional ownership of a property. We are of the considered view that if the legislature in all its wisdom would had sought to even bring a partial or fractional ownership of a residential house also within the gamut of the disqualification contemplated under the aforesaid statutory p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt from absolute ownership. In the case of residential unit, none of the co-owners can claim that he is the owner of residential house. Ownership of a residential house, in our opinion, means ownership to the exclusion of all others. Therefore, where a house is jointly owned by two or more persons, none of them can be said to be the owner of that house. This view of ours is fortified by the judgment of the Hon'ble Supreme Court in the case of Seth Banarsi Dass Gupta vs. CIT (1987) 64 CTR (SC) 142 : (1987) 166 ITR 783 (SC), wherein, it was held that a fractional ownership was not sufficient for claiming even fractional depreciation under s. 32 of the Act. Because of this judgment, the legislature had to amend the provisions of s. 32 w.e.f. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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