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TMI Blog1993 (2) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee claimed relief under section 54F of the Act on the ground that out of the capital gains he had purchased a residential flat for Rs. 4,50.000. The ITO gave deduction of Rs. 2.29,883 from the Long Term Capital Gains as per provisions of section 54F of the Act by accepting the submissions of the assessee that the assessee had purchased residential accomodation on 20-8-1983 within the time prescribed under said provision. The assessee had filed appeal before the CIT (Appeals) regarding computation of capital gains. The dispute in the appeal before the CIT (Appeals) was in respect of cost of acquisition. That dispute was decided by the CIT (Appeals) by order dated 28-10-1988. 3. Thereafter the learned Commissioner of Income-tax initi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 54F was justified. However, the learned Commissioner held that the transaction in question did not amount to purchase because it was not evidenced by a registered sale deed. He rejected the submissions of the assessee to the effect that the order of the ITO granting relief under section 54F had merged in the order of the CIT (Appeals) dated 28-10-1988. He directed the ITO to withdraw the relief under section 54F of the Act. 6. After considering the submissions of the parties, we are of the opinion that the order of the learned CIT cannot be sustained. We proceed to give our reasons : 7. As already stated it is now an admitted fact that the transaction which gave rise to capital gains had taken place on 21-8-1982. It follows that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8 and that said Corporation was in possession of said flat as owner thereof and that the same had been sold to the assessee for Rs. 4,50,000 and that the said consideration had been paid by the assessee to said Corporation by Demand Draft. It is further mentioned in this agreement that in the meeting of the abovementioned Association which was held on that very day, a resolution for transfer in favour of assessee had been passed and that the transfer fees of Rs. 500 had been paid by the vendor to the Association and that thereafter the assessee would occupy the said flat as owner by virtue of transfer of share certificate No. 8 in assessee's favour along with the said flat. At page 36 is the copy of the resolution passed in the meeting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with several flats was owned by the Association which had been registered as Non-Trading Corporation. Allotment of flat by the Association would, in the circumstances of the case, amount to purchase by the person in whose favour allotment was made within the meaning of section 54F of the Act. 11. In this connection we may refer to the decision of Supreme Court in CIT v. T.N. Aravinda Reddy [1979] 120 ITR 46 to which our attention was drawn by the learned counsel for the assessee. It has been held in said decision that the word "purchase" in section 54(1) had to be given its common meaning viz., buy for a price or equivalent of price by payment in kind or adjustment towards a debt or for other monetary consideration. It was held in said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. This submission of the department was wholly untenable. This is a case where the learned CIT has recorded a definite finding that relief under section 54F was not available to the assessee. The assessee was entitled to challenge this finding by filing the appeal. This is not a case where the learned CIT has not expressed any opinion on the merits of controversy and has merely directed the ITO to make further investigation. For this reason other decisions cited by the learned DR viz. Sushil Ansal v. CIT [1986] 160 ITR 308 (Delhi) and Nawab Sir Mir Osman Ali Khan v. CWT [1986] 162 ITR 888 (SC) and also two decisions of Tribunal were wholly irrelevant. 14. For reasons stated above, the order of the CIT under section 263 of the Act is here ..... X X X X Extracts X X X X X X X X Extracts X X X X
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