INCOME TAX ACT, 1961

Section 54F

Capital Gain - Exemption under section 54F - Assessee claimed exemption in respect of investment in two bungalows -

The assessee in the year under consideration had declared income under the head capital gain after claiming the exemption under sect ion 54F of the Act. The assessee in suppor of the exemption claimed under section 54F of the Act con tended that he had made investment in 2 bungalows which are adjacent to each other. However, AO was of the view that assessee could claim the exemption under section 54F with respect to investment in one bungalow only. Accordingly, he disallowed excess claim under section 54F. Held: There could be a situation that the family of the assessee is quite large, comprising of several members in the family and therefore, he needs two properties adjacent to each other to accommodate his family members. Assessee could not be deprived of the benefit conferred under the statute merely on the reasoning that there were two different registries of the buildings/properties. It is also not a case of revenue/assessee that both the properties purchased by assessee were located in different graphical area. Therefore, assessee was entitled for the exemption provided under section 54F.

REFERRED : CIT v. D. Ananda Basappa (2009) 309 ITR 329 (Kar.) : 2009 TaxPub(DT) 0955 (Karn-HC)

FAVOUR : In assessee's favour

A.Y. : 2015-16

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