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TMI Blog1984 (3) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... A, New Hyderabad, Lucknow, vide sale deed dated 17-10-1974 for Rs. 49,800. Although the construction of a house thereon was started prior to 16-5-1975 when the old residence (at Delhi) was sold, the construction was completed on 7-3-1977. The assessee originally declared a capital gain of Rs. 24,433 as a result of the transfer of the said capital asset. However, in the revised return this capital gain was omitted and exemption was claimed under section 54. Section 54 provides that where a capital gain arises from the transfer of a capital asset (to which the provisions of section 53 of the Act are not applicable) being buildings or lands appurtenant thereto, the income of which is chargeable under the head 'Income from house property', whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property was sold on 16-5-1975 and the construction was started immediately thereafter, i.e., much earlier than the sale of the property at New Delhi. (vii) It is likely that the husband and children might be using the Delhi property for them but on account of this the assessee did not become entitled to the relief claimed. (viii) The property could not be said to have been mainly occupied for residential purposes. (ix) The mere fact that the assessee held a ration card with reference to Delhi address was not conclusive of the assessee's residence at Delhi. On the basis of the above directions, the ITO held that the assessee was not entitled to any relief under section 54. He worked out the capital gains at Rs. 1,34,295 after taking the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e word 'mainly' in Words and Phrases Legally Defined by John B. Saunders, Vol. 3, Second edn.: "Mainly (A town planning authority granted permission to develop an area subject to a condition that occupation of the houses built thereon should be limited to certain classes of persons including those employed in an industry 'mainly' dependent on agriculture). 'The word "mainly" at once gives rise to difficulties. Probably it means "more than half" and this was the meaning which this House gave to the phrase "the bulk thereof" in Bromley v. Tryon [1952] A.C. 265.' Fawcett Properties Ltd. v. Buckingham County Council [1961] A.C. 636, H.L. per Lord Morton of Henryton, at p. 669." According to him, on facts the ground floor portion, which was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Talkatora Road, Lucknow, and that it is only from 1-1-1973 to 30-6-1973 that the assessee was posted in Delhi. Placing reliance on the decision of the Hon'ble Madras High Court in CIT v. C. Jayalakshmi [1981] 132 ITR 82, he submitted that the accommodation on the ground floor and the first floor was identical ; that there was no excess area on the ground floor and that the other things like lawns, flower beds, etc., were to be equally enjoyed. 6. We have considered the rival submissions as also the decisions referred to above. Having regard to the decisions relied upon on both the sides as also to the definition of the word 'mainly'. It is clear that it means 'more than half'. Therefore, the question to be factually resolved is whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the terrace above the first floor, lawns, flower beds on all sides and two verandahs which until now was under the self-occupation of the vendor has been delivered on the vendee on the spot on date hereof. That the first floor of the said property with one garage, one servant quarter, and one half of the terrace is under the tenancy of Shri R.N. Minocha on the monthly rent of Rs. 250 (Rupees two hundred and fifty only) and the proprietary possession and ownership of the same has also been delivered to the vendee by attorning the said tenant up to the vendee. The said tenant shall be duty informed by the vendor to attorn to the vendee from the date hereof, recognise him a landlord and to pay future rents to him and that the vendor has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly' for the purposes of her own residence, we are of the view that it constituted more than one-half and, therefore, the assessee could be said to be using the house property in question mainly for the purposes of her own residence. Therefore, the assessee was duly entitled to claim exemption under section 54. On account of this finding, arguments were not heard by us on the assessee's alternative submission that the capital gains, in any case, required to be assessed on pro rata basis for the occupied and rented portion of the house and that deduction under section 54 required to be allowed against the self-occupied portion. We have, therefore, not considered the said alternative submission.
7. The appeal is allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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