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Facts
The assessee claimed a deduction under Section 54F of the Income Tax Act, 1961, for the acquisition of a fractional share in a residential property. The Assessing Officer disallowed this claim, stating that the exemption is only for purchasing or constructing a new residential house and not for acquiring a share in an existing property. The CIT(A) upheld this disallowance.
Held
The Tribunal noted that the issue of whether purchasing a fractional interest or share in a property qualifies for deduction under Section 54F is settled by various judicial precedents, including decisions from the Supreme Court and High Courts. These decisions interpret the term 'purchase' broadly to include acquiring a share or interest in a property.
Key Issues
Whether the acquisition of a fractional share/interest in a residential property qualifies for deduction under Section 54F of the Income Tax Act, 1961, when the assessee has sold shares.
Sections Cited
54F, 143(3), 143(3A), 143(3B), 54EC
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Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
This appeal by the assessee is directed against order dated 12.12.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
1. On the facts and in the circumstances of 1. On the facts and in the circumstances of the appellant's case and in the appellant's case and in law, the Learned Commissioner of Income Tax (Appeals) erred in not law, the Learned Commissioner of Income Tax (Appeals) erred in not law, the Learned Commissioner of Income Tax (Appeals) erred in not quashing the assessment order passed by the Ld. Assessing Officer u/s quashing the assessment order passed by the Ld. Assessing Officer u/s quashing the assessment order passed by the Ld. Assessing Officer u/s 143(3) r.w.s. 143(3A) and 143(3B) of the Income Tax Act, 1961. 143(3) r.w.s. 143(3A) and 143(3B) of the Income Tax Act, 1961. 143(3) r.w.s. 143(3A) and 143(3B) of the Income Tax Act, 1961.
2. On the facts and in the c 2. On the facts and in the circumstances of the appellant's case and in ircumstances of the appellant's case and in Law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming Law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming Law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming that the acquisition of additional share in the existing house does not that the acquisition of additional share in the existing house does not that the acquisition of additional share in the existing house does not qualify for the deduction u/s 54F of the Income Tax Act, 1961. qualify for the deduction u/s 54F of the Income Tax Act, 1961. qualify for the deduction u/s 54F of the Income Tax Act, 1961. 3. On the facts and in the circumstances of the appellant's case and in he facts and in the circumstances of the appellant's case and in he facts and in the circumstances of the appellant's case and in Law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming Law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming Law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs. 2,96,25,689/ the disallowance of Rs. 2,96,25,689/- made by the Ld. Assessing made by the Ld. Assessing Officer u/s 54F of the Income Tax Act, 1961. Officer u/s 54F of the Income Tax Act, 1961. 2. Briefly stated, facts of the case are that the assessee filed tated, facts of the case are that the assessee filed tated, facts of the case are that the assessee filed return of income for the year under consideration declaring total return of income for the year under consideration declaring total return of income for the year under consideration declaring total income at Rs.6,12,79,140/ income at Rs.6,12,79,140/-. The return of income filed by the . The return of income filed by the assessee was selected for scrutiny and statutory notices under the assessee was selected for scrutiny and statutory notices under the assessee was selected for scrutiny and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and complied ax Act, 1961 (in short ‘the Act’) were issued and complied ax Act, 1961 (in short ‘the Act’) were issued and complied with. In the assessment completed u/s 143(3) of the Act on with. In the assessment completed u/s 143(3) of the Act on with. In the assessment completed u/s 143(3) of the Act on 13.04.2021, the Ld. Assessing Officer disallowed claim of the 13.04.2021, the Ld. Assessing Officer disallowed claim of the 13.04.2021, the Ld. Assessing Officer disallowed claim of the assessee for deduction u/s 54 assessee for deduction u/s 54F of the Act against the long term of the Act against the long term capital gain on sale of shares on sale of shares of M/s ITZ Cash Card Ltd Card Ltd.
3. On further appeal, the Ld. CIT(A) upheld the disallowance On further appeal, the Ld. CIT(A) upheld the disallowance On further appeal, the Ld. CIT(A) upheld the disallowance observing as under:
“7.1.2 In the para 5 of his order, the Ld. A.O. mentioned that this 7.1.2 In the para 5 of his order, the Ld. A.O. mentioned that this 7.1.2 In the para 5 of his order, the Ld. A.O. mentioned that this exemption is available only for purchasing or constructing a exemption is available only for purchasing or constructing a exemption is available only for purchasing or constructing a new residential house property but not acquiring the shares of existing residential house property but not acquiring the shares of existing residential house property but not acquiring the shares of existing property. The Ld. A.O. has given show cause notice to the appellant on property. The Ld. A.O. has given show cause notice to the appellant on property. The Ld. A.O. has given show cause notice to the appellant on 07.04.2021. In response to the notice, the appellant claimed that the 07.04.2021. In response to the notice, the appellant claimed that the 07.04.2021. In response to the notice, the appellant claimed that the purchase of share from co purchase of share from co-owner is qualified for exemption u/s 54F of d for exemption u/s 54F of the Act. However, the A.O. did not accept the contentions of the the Act. However, the A.O. did not accept the contentions of the the Act. However, the A.O. did not accept the contentions of the appellant and denied the exemption on this ground. During the appellant and denied the exemption on this ground. During the appellant and denied the exemption on this ground. During the appellate proceedings, in his written submissions, the appellant re appellate proceedings, in his written submissions, the appellant re appellate proceedings, in his written submissions, the appellant re- iterated his contention that the e iterated his contention that the exemption is available to the purchased xemption is available to the purchased of share of the existing property. I have gone through the order of the of share of the existing property. I have gone through the order of the of share of the existing property. I have gone through the order of the A.O. and the submissions of the appellant and noticed that the A.O. and the submissions of the appellant and noticed that the A.O. and the submissions of the appellant and noticed that the contention of the appellant is not correct. This exemption is only contention of the appellant is not correct. This exemption is only contention of the appellant is not correct. This exemption is only available to pu available to purchase a new house, not for acquiring the share of rchase a new house, not for acquiring the share of existing house. existing house. The appellant also relied upon a decision The appellant also relied upon a decision mentioned in para 4.15 (Chandrakant S. Choksi HUF v. mentioned in para 4.15 (Chandrakant S. Choksi HUF v. mentioned in para 4.15 (Chandrakant S. Choksi HUF v. Assistant Commissioner of Income Assistant Commissioner of Income-tax, Circle 18 (1), Mumbai) in tax, Circle 18 (1), Mumbai) in his written submissions. I hav his written submissions. I have noticed that this decision has e noticed that this decision has not achieved the finality, although the facts are similar not achieved the finality, although the facts are similar not achieved the finality, although the facts are similar. The appellant has not given any other case laws of the Hon'ble Supreme appellant has not given any other case laws of the Hon'ble Supreme appellant has not given any other case laws of the Hon'ble Supreme Court which can be followed. I hold that the Ld. A.O. has rightly Court which can be followed. I hold that the Ld. A.O. has rightly Court which can be followed. I hold that the Ld. A.O. has rightly interpreted the provisions interpreted the provisions of the Act and the grounds taken by the of the Act and the grounds taken by the appellant are dismissed. appellant are dismissed.”
As far as grounds raised on merit ( i.e. Ground Nos 2 and 3 ) , As far as grounds raised on merit ( i.e. Ground Nos 2 and 3 ) , As far as grounds raised on merit ( i.e. Ground Nos 2 and 3 ) , we have heard rival submission of the parties and perused the e have heard rival submission of the parties and perused the e have heard rival submission of the parties and perused the relevant material on record. In the case assessee earned long term relevant material on record. In the case assessee earned long relevant material on record. In the case assessee earned long capital gain on sale of un capital gain on sale of un-listed shares M/s ITZ Cash Card Ltd. listed shares M/s ITZ Cash Card Ltd. amounting to Rs.5,79,99,799/ amounting to Rs.5,79,99,799/-. Against the said long term capital he said long term capital gain, the assessee made investment he assessee made investment of Rs.50,00,000/ of Rs.50,00,000/- in NHAI Bonds u/s 54EC of the Act. Bonds u/s 54EC of the Act. The deduction u/s 54EC is The deduction u/s 54EC is not in dispute. The assessee also claimed further deduction against the dispute. The assessee also claimed further deduction against the dispute. The assessee also claimed further deduction against the long term capital gain u/s 54 long term capital gain u/s 54F of the Act amounting to of the Act amounting to Rs.2,96,25,689/- for a for acquiring 5% share and 15% share cquiring 5% share and 15% share in Flat No. 233, Kalpataru Horizon, S K Ahire Marg, Opposite Doordarshan 233, Kalpataru Horizon, S K Ahire Marg, Opposite Doordarshan 233, Kalpataru Horizon, S K Ahire Marg, Opposite Doordarshan Tower, Worli, Mumbai orli, Mumbai acquired from Dr. Nirmal Siremal Surya and from Dr. Nirmal Siremal Surya and Smt. Seema Siremal Surya Smt. Seema Siremal Surya, respectively. The Assessing Officer respectively. The Assessing Officer disallowed the claim of deduction u/s 54F of the Act on the ground disallowed the claim of deduction u/s 54F of the Act on the ground disallowed the claim of deduction u/s 54F of the Act on the ground that assessee did not invest long term capital gain in acquiring new that assessee did not invest long term capital gain in acquiring new that assessee did not invest long term capital gain in acquiring new residential house as mandate sidential house as mandated u/s 54F of the Act but u/s 54F of the Act but only acquired additional share in the old house. We find that the Ld. CIT(A) additional share in the old house. We find that the Ld. CIT(A) additional share in the old house. We find that the Ld. CIT(A) though admitted that facts of the instant case are similar to facts in though admitted that facts of the instant case are similar to facts in though admitted that facts of the instant case are similar to facts in Chandrakant Chandrakant Chandrakant S. S. S. Choksi Choksi Choksi HUF HUF HUF v. v. v. Assistant Assistant Assistant the case of Commissioner of Income sioner of Income-tax, Circle 18(1), Mumbai [2015] 53 tax, Circle 18(1), Mumbai [2015] 53 taxmann.com 312 (Mumbai (Mumbai-Trib.) wherein the Co- -ordinate Bench of the Tribunal has allowed deduction. The Ld. CIT(A) has not of the Tribunal has allowed deduction. The Ld. CIT(A) has not of the Tribunal has allowed deduction. The Ld. CIT(A) has not followed the decision merely for t followed the decision merely for the reason that said decision had he reason that said decision had not attained finality. In our opinion, following the legal discipline finality. In our opinion, following the legal discipline finality. In our opinion, following the legal discipline the Ld. CIT(A) was required to follow the precedent on the issue in required to follow the precedent on the issue in required to follow the precedent on the issue in dispute which was in operation during the relevant period. in operation during the relevant period. in operation during the relevant period.
4.1 Before us, the Ld. Departmental Representative (DR) has not Before us, the Ld. Departmental Representative (DR) has not Before us, the Ld. Departmental Representative (DR) has not brought on record that decision in the case of Chandrakant S. on record that decision in the case of Chandrakant S. on record that decision in the case of Chandrakant S. Choksi HUF (supra) has been reversed by the Hon’ble High Court Choksi HUF (supra) has been reversed by the Hon’ble High Court Choksi HUF (supra) has been reversed by the Hon’ble High Court and therefore till it is and therefore till it is not reversed and in operation, and in operation, the Ld. CIT(A) is bound to follow the same. In the said decision, the Co-ordinate is bound to follow the same. In the said decision, the Co is bound to follow the same. In the said decision, the Co Bench has followed decision of the Hon’ble Supreme Court in the Bench has followed decision of the Hon’ble Supreme Court in the Bench has followed decision of the Hon’ble Supreme Court in the case of CIT v. T.N. Aravinda Reddy [1979] 120 ITR 46/2 Taxman CIT v. T.N. Aravinda Reddy [1979] 120 ITR 46/2 Taxman CIT v. T.N. Aravinda Reddy [1979] 120 ITR 46/2 Taxman 541. The relevant part of the decision of the Co The relevant part of the decision of the Co-ordinate Bench is ordinate Bench is reproduced as under: reproduced as under:
“4.2 So far as the issue, whether the assessee can purchase fractional 4.2 So far as the issue, whether the assessee can purchase fractional 4.2 So far as the issue, whether the assessee can purchase fractional interest, that is, buying of share in the property and whether it can be interest, that is, buying of share in the property and whether it can be interest, that is, buying of share in the property and whether it can be held as purchase or not, we find that this issue, in principle, is settled held as purchase or not, we find that this issue, in principle, is settled held as purchase or not, we find that this issue, in principle, is settled Court in the case of T.N. by the decision of the Hon'ble Supreme by the decision of the Hon'ble Supreme Court in the case of Aravinda Reddy Aravinda Reddy. In the case before the Hon'ble Supreme Court, four . In the case before the Hon'ble Supreme Court, four brothers were the members of HUF, who had partitioned a joint family brothers were the members of HUF, who had partitioned a joint family brothers were the members of HUF, who had partitioned a joint family property, leaving an undivided common house. The three brothers property, leaving an undivided common house. The three brothers property, leaving an undivided common house. The three brothers executed a release deed in fa executed a release deed in favour of the elder brother for a vour of the elder brother for a consideration which was treated as purchase of the house by the elder consideration which was treated as purchase of the house by the elder consideration which was treated as purchase of the house by the elder brother. The elder brother had sold one of his houses and out of the sale brother. The elder brother had sold one of his houses and out of the sale brother. The elder brother had sold one of his houses and out of the sale proceeds, paid the consideration to his brothers to acquire their shares proceeds, paid the consideration to his brothers to acquire their shares proceeds, paid the consideration to his brothers to acquire their shares in the house. In this context it was held that the elder brother would be house. In this context it was held that the elder brother would be house. In this context it was held that the elder brother would be entitled to relief u/s 54(1). Similar view has been taken by the Hon'ble entitled to relief u/s 54(1). Similar view has been taken by the Hon'ble entitled to relief u/s 54(1). Similar view has been taken by the Hon'ble Dehi High Court in the case of Chandanben Maganlal (supra), wherein Dehi High Court in the case of Chandanben Maganlal (supra), wherein Dehi High Court in the case of Chandanben Maganlal (supra), wherein the Hon'ble High Court held that sale proceeds i the Hon'ble High Court held that sale proceeds invested for purchase of nvested for purchase of interest in the residential house owned by the assessee's husband and interest in the residential house owned by the assessee's husband and interest in the residential house owned by the assessee's husband and son, amounts to purchase and hence entitled for exemption u/s 54F. son, amounts to purchase and hence entitled for exemption u/s 54F. son, amounts to purchase and hence entitled for exemption u/s 54F. Section 54F, per se, does not prohibit or bar that fractional interest or Section 54F, per se, does not prohibit or bar that fractional interest or Section 54F, per se, does not prohibit or bar that fractional interest or share in the property share in the property, which has been purchased, will not be entitled for , which has been purchased, will not be entitled for deduction u/s 54F. Thus, following the said proposition laid down by deduction u/s 54F. Thus, following the said proposition laid down by deduction u/s 54F. Thus, following the said proposition laid down by the Hon'ble Court, we hold that the assessee is eligible for deduction the Hon'ble Court, we hold that the assessee is eligible for deduction the Hon'ble Court, we hold that the assessee is eligible for deduction u/s 54F on the amount spent on acquisition of rights in a prope u/s 54F on the amount spent on acquisition of rights in a prope u/s 54F on the amount spent on acquisition of rights in a property from the other members of the family or HUF. the other members of the family or HUF.” 4.2 Before us, the Ld. counsel for the assessee has relied on other Before us, the Ld. counsel for the assessee has relied on other Before us, the Ld. counsel for the assessee has relied on other decisions of the Co- -ordinate Bench in the case of Narinder Kaur in the case of Narinder Kaur Bhatia in for Bhatia in ITA No. 1791/Mum/2011 for assessment year 2007 assessment year 2007-08 where also the Tribunal following the decision in the case of T.N. Tribunal following the decision in the case of T.N. Tribunal following the decision in the case of T.N. Aravinda Reddy (supra) Aravinda Reddy (supra), allowed the claim of the deduction u/s 54 allowed the claim of the deduction u/s 54F of the Act for acquiring fraction of the share of the property. The of the Act for acquiring fraction of the share of the property. The of the Act for acquiring fraction of the share of the property. The relevant finding of the Tribunal is reproduced as under: relevant finding of the Tribunal is reproduced as under: relevant finding of the Tribunal is reproduced as under:
“9. Now coming to the other part of the issue, whether purchasing of ing to the other part of the issue, whether purchasing of ing to the other part of the issue, whether purchasing of share of the son who is co share of the son who is co-sharer in the flat amounts to purchase or not. sharer in the flat amounts to purchase or not. We find that this issue, in principle, is settled by the decision of Hon'ble We find that this issue, in principle, is settled by the decision of Hon'ble We find that this issue, in principle, is settled by the decision of Hon'ble Supreme Court in the case of CIT Vs. T.N. Aravi Supreme Court in the case of CIT Vs. T.N. Aravinda Reddy reported in nda Reddy reported in (1979) 120 ITR page 46 (SC) wherein it was held that the word (1979) 120 ITR page 46 (SC) wherein it was held that the word (1979) 120 ITR page 46 (SC) wherein it was held that the word 'purchase' in section 54(1) had to be given a common meaning, that is, 'purchase' in section 54(1) had to be given a common meaning, that is, 'purchase' in section 54(1) had to be given a common meaning, that is, buying for a price or equivalent of a price on by payment in kind or buying for a price or equivalent of a price on by payment in kind or buying for a price or equivalent of a price on by payment in kind or adjustment towards debt or for o adjustment towards debt or for other monitory consideration. In the ther monitory consideration. In the case before the Hon'ble Supreme Court, four brothers were the case before the Hon'ble Supreme Court, four brothers were the case before the Hon'ble Supreme Court, four brothers were the members of HUF, who had partitioned a joint family property, leaving members of HUF, who had partitioned a joint family property, leaving members of HUF, who had partitioned a joint family property, leaving an undivided common house. The three brothers executed a release an undivided common house. The three brothers executed a release an undivided common house. The three brothers executed a release deed in favour of the e deed in favour of the elder brother for a consideration which was lder brother for a consideration which was treated as purchase of the house by the elder brother. The elder brother treated as purchase of the house by the elder brother. The elder brother treated as purchase of the house by the elder brother. The elder brother had sold one of his house and out of the sale proceeds, paid the had sold one of his house and out of the sale proceeds, paid the had sold one of his house and out of the sale proceeds, paid the consideration to his brothers to acquire their shares in the house. In this consideration to his brothers to acquire their shares in the house. In this consideration to his brothers to acquire their shares in the house. In this context it was held that the elder brother would be entitled to relief u/s context it was held that the elder brother would be entitled to relief u/s context it was held that the elder brother would be entitled to relief u/s 54(1) Similarly the Hon'ble Gujarat High Court in CIT Vs. Chandan Ben Similarly the Hon'ble Gujarat High Court in CIT Vs. Chandan Ben Similarly the Hon'ble Gujarat High Court in CIT Vs. Chandan Ben Maganlal has held that sale proceeds invested for purchase of interest Maganlal has held that sale proceeds invested for purchase of interest Maganlal has held that sale proceeds invested for purchase of interest in the residential house owned by asses in the residential house owned by assessee's husband and son see's husband and son amounts to purchase, hence entitled for exemption u/s 54. There are amounts to purchase, hence entitled for exemption u/s 54. There are amounts to purchase, hence entitled for exemption u/s 54. There are other High Court decisions on this score, which have been referred and other High Court decisions on this score, which have been referred and other High Court decisions on this score, which have been referred and relied upon by the Ld. CIT(A). Thus, following the said proposition laid by the Ld. CIT(A). Thus, following the said proposition laid by the Ld. CIT(A). Thus, following the said proposition laid down by the Hon'ble co down by the Hon'ble courts, we hold that the reasoning and the urts, we hold that the reasoning and the conclusion drawn by the Ld.CIT(A) is legally correct and the same is conclusion drawn by the Ld.CIT(A) is legally correct and the same is conclusion drawn by the Ld.CIT(A) is legally correct and the same is upheld. In the result the grounds raised by the Revenue are dismissed. upheld. In the result the grounds raised by the Revenue are dismissed. upheld. In the result the grounds raised by the Revenue are dismissed.”
4.3 Further, the Ld. counsel for the assessee also relied on the Further, the Ld. counsel for the assessee also relied on the Further, the Ld. counsel for the assessee also relied on the decision of the Hon’ble Gujarat High Court in the case of CIT v. of the Hon’ble Gujarat High Court in the case of CIT v. of the Hon’ble Gujarat High Court in the case of CIT v. Chandanben Maganlal [2000] 245 ITR 182 (Guj). The relevant Chandanben Maganlal [2000] 245 ITR 182 (Guj). The relevant Chandanben Maganlal [2000] 245 ITR 182 (Guj). The relevant finding of the Hon’ble High Court is reproduced as under: finding of the Hon’ble High Court is reproduced as under: finding of the Hon’ble High Court is reproduced as under:
“10. So far as the first point is concerned, we are of the view that when 10. So far as the first point is concerned, we are of the view that when 10. So far as the first point is concerned, we are of the view that when the Act enables an assessee to get exemption from payment of tax in nables an assessee to get exemption from payment of tax in nables an assessee to get exemption from payment of tax in respect of purchase or construction of a residential house, purchase or respect of purchase or construction of a residential house, purchase or respect of purchase or construction of a residential house, purchase or construction of a portion of the house, should also enable the assessee construction of a portion of the house, should also enable the assessee construction of a portion of the house, should also enable the assessee to claim the exemption. It is possible that a person to claim the exemption. It is possible that a person may not be in a may not be in a position to purchase the whole residential house at a time and in the position to purchase the whole residential house at a time and in the position to purchase the whole residential house at a time and in the circumstances an assessee might purchase a portion of the house or circumstances an assessee might purchase a portion of the house or circumstances an assessee might purchase a portion of the house or some interest in the share in the house. In the instant case, 15 per cent some interest in the share in the house. In the instant case, 15 per cent some interest in the share in the house. In the instant case, 15 per cent of undivided share in the hou of undivided share in the house property was purchased by the se property was purchased by the assessee from her husband and her son. It is a settled legal position assessee from her husband and her son. It is a settled legal position assessee from her husband and her son. It is a settled legal position that when there is a doubt about the meaning of any statutory that when there is a doubt about the meaning of any statutory that when there is a doubt about the meaning of any statutory provision, the provision is to be understood in the sense in which it can provision, the provision is to be understood in the sense in which it can provision, the provision is to be understood in the sense in which it can harmonise with th harmonise with the subject of the enactment and the object which the e subject of the enactment and the object which the legislature has in view. In view of the said principle, it is very clear that legislature has in view. In view of the said principle, it is very clear that legislature has in view. In view of the said principle, it is very clear that when the legislature has desired to give exemption to an assessee who when the legislature has desired to give exemption to an assessee who when the legislature has desired to give exemption to an assessee who is selling his residential house so as to purchase anoth is selling his residential house so as to purchase another residential er residential house, one cannot interpret the provision in a manner which would house, one cannot interpret the provision in a manner which would house, one cannot interpret the provision in a manner which would disentitle the assessee to claim the exemption under the section merely disentitle the assessee to claim the exemption under the section merely disentitle the assessee to claim the exemption under the section merely because the assessee could not purchase the residential house in toto because the assessee could not purchase the residential house in toto because the assessee could not purchase the residential house in toto and the assessee purchased only a and the assessee purchased only a portion of the house.
We are supported in our above referred view by a judgment 11. We are supported in our above referred view by a judgment 11. We are supported in our above referred view by a judgment delivered in case of CIT vs. Tikyomal Jasanmal (1971) 82 ITR 95 (Guj) : delivered in case of CIT vs. Tikyomal Jasanmal (1971) 82 ITR 95 (Guj) : delivered in case of CIT vs. Tikyomal Jasanmal (1971) 82 ITR 95 (Guj) : TC 22R.261, wherein it was held that a portion of house property TC 22R.261, wherein it was held that a portion of house property TC 22R.261, wherein it was held that a portion of house property constructed by the assessee can be constructed by the assessee can be taken as a unit of house property. taken as a unit of house property. In the case referred to hereinabove, the assessee had constructed a In the case referred to hereinabove, the assessee had constructed a In the case referred to hereinabove, the assessee had constructed a portion of the house property during the period prescribed under the portion of the house property during the period prescribed under the portion of the house property during the period prescribed under the provisions of s. 54 whereas in the case with which we are concerned, provisions of s. 54 whereas in the case with which we are concerned, provisions of s. 54 whereas in the case with which we are concerned, the assessee h the assessee had purchased some interest in the said property as the ad purchased some interest in the said property as the assessee had purchased 15 per cent interest in the property. The ratio assessee had purchased 15 per cent interest in the property. The ratio assessee had purchased 15 per cent interest in the property. The ratio of the case referred to hereinabove can be very well applied in the of the case referred to hereinabove can be very well applied in the of the case referred to hereinabove can be very well applied in the instant case because in the case referred to hereinabove the a instant case because in the case referred to hereinabove the a instant case because in the case referred to hereinabove the assessee had constructed portion of the house property whereas in the instant had constructed portion of the house property whereas in the instant had constructed portion of the house property whereas in the instant case the assessee had purchased some interest in the house property. case the assessee had purchased some interest in the house property. case the assessee had purchased some interest in the house property.
In the circumstances, we are of the view that the Tribunal was right 12. In the circumstances, we are of the view that the Tribunal was right 12. In the circumstances, we are of the view that the Tribunal was right when it came to the conclusion that when it came to the conclusion that merely because the assessee had merely because the assessee had purchased 15 per cent of undivided share in a residential house, the purchased 15 per cent of undivided share in a residential house, the purchased 15 per cent of undivided share in a residential house, the assessee cannot be disentitled from making a claim for exemption assessee cannot be disentitled from making a claim for exemption assessee cannot be disentitled from making a claim for exemption under the provisions of s. 54 of the Act. under the provisions of s. 54 of the Act.”
4.4 Before us, the Ld. DR however relied on the Before us, the Ld. DR however relied on the decision of the Co decision of the Co- ordinate Bench in the case of ACIT v. T.N. Gopal [2009] 121 ITD ordinate Bench in the case of ACIT v. T.N. Gopal [2009] 121 ITD ordinate Bench in the case of ACIT v. T.N. Gopal [2009] 121 ITD 352 (Chennai) wherein the Tribunal has followed the decision of the 352 (Chennai) wherein the Tribunal has followed the decision of the 352 (Chennai) wherein the Tribunal has followed the decision of the Hon’ble High Court of Madras in the case of CIT v. V. Pradeep Hon’ble High Court of Madras in the case of CIT v. V. Pradeep Hon’ble High Court of Madras in the case of CIT v. V. Pradeep Kumar [2007] 290 ITR 90 (Madras). Since, t Kumar [2007] 290 ITR 90 (Madras). Since, the Co-ordinate Bench in ordinate Bench in the case of Chandrakant S. Choksi HUF (supra) followed the the case of Chandrakant S. Choksi HUF (supra) followed the the case of Chandrakant S. Choksi HUF (supra) followed the decision of Hon’ble Supreme Court on the issue in dispute Hon’ble Supreme Court on the issue in dispute Hon’ble Supreme Court on the issue in dispute therefore, the decision followed by the Co therefore, the decision followed by the Co-ordinate Bench being of ordinate Bench being of higher Court, we are bound to follow the same. A e are bound to follow the same. Accordingly, we set ccordingly, we set aside the finding of the Ld. CIT(A) on the issue in dispute and direct aside the finding of the Ld. CIT(A) on the issue in dispute and direct aside the finding of the Ld. CIT(A) on the issue in dispute and direct the Assessing Officer to allow the claim of the assessee of deduction the Assessing Officer to allow the claim of the assessee of deduction the Assessing Officer to allow the claim of the assessee of deduction u/s 54F of the Act. The grounds No u/s 54F of the Act. The grounds Nos. 2 and 3 of the assessee are . 2 and 3 of the assessee are accordingly allowed.
4.5 The ground No. 1 of the appeal was not pressed by the round No. 1 of the appeal was not pressed by the round No. 1 of the appeal was not pressed by the assessee and therefore, same is dismissed as infructuous. assessee and therefore, same is dismissed as infructuous. assessee and therefore, same is dismissed as infructuous.
In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.