9911796707
TMI Blog1997 (2) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... During the previous year relevant to the said assessment year, the assessee sold a house property situated at 10, Pali Road, Bandra, in which the assessee had 3/7ths share. The assessee claimed exemption in respect of her share of capital gains arising from the sale of the said property under section 54 of the Income-tax Act, 1961 ("the Act"), on the ground that she had purchased a new residential accommodation within the period specified therein. The Income-tax Officer did not accept this claim of the assessee as according to him the assessee could not fulfil the condition precedent for applicability of section 54 of the Act in regard to the user of the same by her for her own residence in the two years immediately preceding the date of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to relief under section 54 of the Act if "she was occupying it at any time during that period for the purposes of residence". He, therefore, allowed the appeal of the assessee and reversed the order of the Income-tax Officer. Aggrieved by the above order of the Commissioner (Appeals), the Revenue appealed to the Income-tax Appellate Tribunal ("Tribunal"). The Tribunal did not accept the interpretation put by the Commissioner (Appeals) on section 54 of the Act and following the decision of the Madras High Court in M. Viswanathan v. CIT [1979] 117 ITR 244, held that section 54 was not applicable unless the property was continuously used by the assessee for his own residence during the whole of the period of two years prior to the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the uncontroverted factual position in this case is that the transfer took place in May, 1975, and the assessee was using the same for her residence only from January, 1974. That being so, admittedly, the house property in question was not used by her for her own residence for a period of two years. So far as the legal contention of the assessee that the user of the premises at any time within two years is sufficient compliance with the requirement of section 54 is concerned, learned counsel submits that this part of the controversy now stands concluded by the decision of this court in CIT v. Sudhir Jayantilal Mulji [1995] 214 ITR 154, wherein this court has held that for obtaining the benefit of section 54, the assessee must have been in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 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 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, the cost shall be reduced by the amount of the capital gain. " It is clear from the above section that the use of the house by the assessee or by his or her parents mainly for the purposes of own or the parent's own residence is a condition precedent for the applicability of this section. The true meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X
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