INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Exemption under section 54 - CIT held that assessee was entitled to exemption under section 54F, and not under section 54 -

Case of the assessee was that CIT erred in directing AO to disallow exemption under section 54 and instead allowed exemption under section 54F on the analogy that assessee only transferred development rights in land. CIT ought to have appreciated that appellant in fact has transferred all the rights in the residential bungalow 'Jagdish' and as such eligible for exemption under section 54. Held: Development Agreement was crystal clear that the land was transferred along with the house property and that it was also the responsibility of developer to demolish the house property standing on the said property. These facts have been analyzed by AO through notice under section 142(1) and questionnaire and even the replies submitted by the assessee were placed on record. Only reasons for which CIT decided that assessee was entitled to exemption under section 54F and not under section 54 because as per the Development Agreement, the term 'owner' appears therein referring to the assessee. Clauses of the Development Agreement where the entire transfer of house property along with the land given to the developer. Department could not place on record any evidence categorically showing that there was transfer of development rights only by assessee. Thus, exemption under section 54 was correctly claimed by assessee

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

INCOME TAX ACT, 1961

Section 263

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