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TMI Blog1991 (6) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Even though both the flats were purchased by the two brothers in their individual names, both the flats were jointly used by them. During the relevant previous year, the assessee transferred one room admeasuring 198 sq.ft. to his brother for Rs. 2,10,000. The capital gains after deducting the proportionate cost price from the sale proceeds amounted to Rs. 66,510. The assessee claimed exemption u/s. 53 of the Act in respect of the capital gains so arose. In this connection, during the course of the assessment proceedings, the assessee wrote the following letter dated 3-8-1990 : " In connection with the assessment proceedings for assessment year 1988-89 you were pleased to raise a query about allowability of deduction u/s. 53 on sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, the ITO rejected the assessee's claim for exemption u/s. 53 of the Act, in the following manner : " It is to be noted here that assessee has not sold his entire flat or house, but a part of another flat or house. Even if it is taken he has sold a part or portion of his flat to his brother it cannot be said that he has no other residential house on the date of the sale. Assessee has sold only part of his flat and not entire flat. Section 53 of the I.T. Act, 1961 is also very clear and speak a house which does not mean a part of the house or a room. If assessee's version is accepted then assessee will go on selling every year part of his house and claim exemption of long term capital gain every year u/s. 53 of the I.T. Act. It was v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the submissions, which were made before the I.T. authorities and strongly urged that the I.T. authorities ought to have accepted his claim for exemption u/s. 53 of the Act. The learned representative for the department, on the other hand, supported the action of the I.T. authorities. 7. I have carefully considered the rival submissions of the parties. In order to better appreciate the stand taken on behalf of the assessee, it would be necessary to reproduce below the provisions of section 53 of the Act, as it stood during the relevant time : " 53. Notwithstanding anything, contained in section 45, where in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-ter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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