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TMI Blog2016 (8) TMI 1545X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee/ respondent herein. In response to the notice under Section 143(2), an authorised representative of the assessee appeared before the assessment officer and the assessment was completed under Section 143(3) of the Income Tax Act, 1961. On 28.11.2014, the impugned order was passed by the Assessment Officer, disallowing the claim under Section 54F of the Income Tax Act, 1961. On completion of the assessment, the Assessing Officer withdrew the benefit of Section 54F of the Income Tax Act, 1961, in the case of the assessee. The disallowance of exemption claimed under Section 54F is Rs. 2,47,52,000/-, as per the Assessment Order issued by the Assessing Officer. 3. Aggrieved by the aforesaid order, the assessee preferred an appeal in ITA No. 256/14-15/A-1 dated 26.02.2015 before the Commissioner of Income Tax (Appeal), on the following grounds :- 1. The order of the Assessing Officer insofar as it denies exemption to the appellant under Section 54F of the Act is erroneous, against the provisions of law and contrary to the facts and circumstances of the case. 2. The Assessing Officer should have found that the appellant does not own the property at Vijayaraghavachari Road a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai-17, was transferred by the appellant in the name of his wife Mrs. Shanthi Thomas, by virtue of settlement deed dated 24.02.2003 and so in the year 2011, when the assessee's land property situated at Sholinganallur, was sold. Hence, the assessee possessed only one property i.e. the residential property at Kodaikanal. While assessing, the Assessment Officer under the presumption that the appellant was in possession of two residential houses on the date of transfer of property, denied the exemption. But, the house property situated at No.24 Vijaya Raghavachari Road, T. Nagar, Chennai-17 stands in the name of the assessee's wife, namely, Mrs. Shanthi Thomas and therefore, the Commissioner of Income Tax (Appeal) came to a conclusion that the assessee had only one property at Kodaikanal and hence the denial of exemption of the Assessment Officer, on the ground that as per Section 27(i) of the Income Tax the assessee is a deemed owner of the property and so he is not eligible for exemption under Section 54F, was reversed and allowed the appeal filed by the assessee. Aggrieved by the aforesaid order passed by the Commissioner of Income Tax (Appeal), the Revenue preferred an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue. 6. Being not satisfied with the order passed by the Tribunal, the Revenue has preferred the instant appeal before this Court, on the following substantial questions of law : 1. Whether on the facts and circumstances of the case, the Tribunal was right in holding that the assessee was entitled to deduction under Section 54F of the Income Tax Act ? 2. Is not the finding of the Tribunal bad by granting relief under Section 54F especially when income from house property transferred by the assessee to his wife is assessable in his hands under Section 64(1)(iv) read with Section 27(i) of the Act as he is the deemed owner of the property ? 3. Whether the finding of the Tribunal is correct in holding that the property gifted to the wife cannot be held as self owned property for the purpose of claiming deduction under Section 54F ? 7. Learned counsel for the Revenue contended before this Court that the assessee has sold the vacant land measuring 11,881 sq.ft. in Sholinganallur Village and realised a long term capital gain of Rs. 2,47,52,000/- but the respondent had claimed exemption under Section 54F. The assessee has purchased a new residential property, a flat, at 4th f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee owns on the date of the transfer of the original asset, or purchases, within the period of one year after such date, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset.' - (a) the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property." 9. The issue involved for consideration in the instant appeal is, whether Section 27(i) of the Act could be read along with Section 54F, for the purpose of "Owner of house property" under the said provision. Section 27(i) is extracted below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, the term "owned" as occurring in Section 32(1) of the Income-Tax Act, 1961, must be assigned a wider meaning. Anyone in possession of property in his own title exercising such dominion over the property as would enable others being excluded therefrom and having the right to use and occupy the property and/or to enjoy its usufruct in his own right would be the owner of the buildings though a formal deed of title may not have been executed and registered as contemplated by the Transfer of Property Act, the Registration Act, etc.". 11. In the case of Commissioner of Income Tax vs. Poder Cement Private Limited & Others [226 ITR 625], the Hon'ble Supreme Court has considered the meaning of "Owner" under the context of Section 22 and 27 of the Indian Income Tax, 1922. The afore cited decision was considered by the Hon'ble Supreme Court for the purpose of the rental income to be calculated on the bonafide annual value of the property. The facts of the said case relates to the provisions of Section 22 of the Act, where charges of the income arises from house property and not the ownership of house property. Such income from house property can be real or notional. It has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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