The Income-tax Officer, Bathinda V. Sh. Jiwan Parkash, Bathinda

ITA 314/ASR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85907 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 10-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Depreciation; Assessment record; Capital receipt
• Section: 54F; 54; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.314(ASR)/2013 ASSESSMENT YEAR:2006-07 PAN :AAOPP6875E INCOME TAX OFFICER, VS. SHRI JIWAN PARKASH WARD-1(1), BATHINDA. S/O SH. AMAR NATH AGGARWAL, 3038-A, GURU KASHI MARG, BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.TARSEM LAL, DR RESPONDENT BY:SH.P.N.ARORA, ADVOCATE DATE OF HEARING:29/01/2015 DATE OF PRONOUNCEMENT:19/02/2015 ORDER PER B.P.JAIN, AM: THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE CIT(A), BATHINDA, DATED 19.02.2013 FOR THE ASSESSMENT YEAR 2006-07. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF : I) RS.30,00,000/- ON ACCOUNT OF DISALLOWANCE OF DEDUCT ION CLAIMED U/S 54F OF THE INCOME TAX ACT, 1961 WITHOUT TAKING INTO ACCOUNT THE FACTS DISCUSSED IN THE ORD ER BY THE AO. ITA NO.315(ASR)/2013 2 II) THE LD. CIT(A) HAS MENTIONED RELIEF OF RS.47,95,453 /- IN HIS ORDER INSTEAD OF RS.30,00,000/- AS ADDED BY TH E AO WHICH IS BAD IN THE EYE OF LAW. 2. THAT IT IS PRAYED THAT ORDER OF THE LD. CIT(A) BE S ET ASIDE AND THAT OF THE AO BE RESTORED. 3. THAT THE ASSESSEE CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OFF OR DISPOSED OFF. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS CLAIMED EXEMPTION U/S 54F OF THE ACT, WHICH WAS ALLOWED BY THE AO. TH E LD. CIT, BATHINDA UNDER SECTION 263 OF THE ACT OBSERVED THAT EXEMPTI ON U/S 54F OF THE ACT, CLAIMED BY THE ASSESSEE AT RS.30,00,000/- HAS WRON GLY BEEN ALLOWED BY THE AO WITHOUT MAKING REQUISITE ENQUIRIES AND AS SUCH THE SAME, REQUIRES TO BE WITHDRAWN. ACCORDINGLY, THE AO VIDE LETTER DATED 1 8.10.2010 ISSUED A NOTICE TO THE ASSESSEE AND PART OF THE SAID LETTER IS REPRODUCED IN THE AOS ORDER AT PAGE 2 & 3 IS AS UNDER: PARA-3 :- YOU HAVE CLAIMED AN EXEMPTION FOR RS. 30 LACS U/S 54 ON ACCOUNT OF PURCHASE OF SHARE OF RESIDENTIAL PLOT IN PLOT NO.79, SECTOR 6, PANCHKULA FROM YOUR BROTHER, SH. HARGOBIN D GOYAL ON 20.01.2006. YOU WERE ALREADY THE OWNER OF THE SHA RE OF THE SAID PLOT. HOWEVER, AS PER DETAILS AVAILABLE IN WEALTH T AX RETURN FOR THE AY 2005-06 OF SH. HARGOBIND GOYAL, HE HAS INCURRED A TOTAL EXPENSES OF ONLY RS.70,512/- AS COST OF CONSTRUCTION OF HIS SHARE OF ABOVE PLOT WHEREAS IN YOUR WEALTH TAX RETURN, COST OF CONSTRUC TION IS RS.36,17,312/- OF YOUR SHARE. IN THE LIGHT OF ABOVE INFORMATION, YOU ARE REQUIRED TO SUBSTANTIATE YOUR CLAIM FOR EXEMPTI ON U/S 54F W.R.T. FOLLOWING POINTS:- A) WHETHER OF A SINGLE PLOT CAN BE TREATED AS ON INDEPENDENT RESIDENTIAL HOUSE FOR THE PURPOSE OF CLAIMING EXEM PTION U/S 54B? ITA NO.315(ASR)/2013 3 B) KINDLY SUBSTANTIATE THE CLAIM W.R.T. PUDA/HUDA RULES. WHETHER UNDER THOSE RULES, SUB DIVISION OF A SINGLE PLOT IS ALLOWABLE INTO TWO INDEPENDENT UNITS, WITH THE BOU NDARIES OF A SINGLE PLOT BEARING A SINGLE PLOT NUMBER? C) SINCE SH.HARGOBIND GOYAL SPENT ONLY RS.70,512/- ON CONSTRUCTION VIS--VIS AMOUNT SPENT BY YOU MORE THA N 36 LACS, IT CASTS A DOUBTS AS TO WHETHER THE CONSTRUCTION BY SH .HARGOBIND GOYAL WAS OF AN INDEPENDENT RESIDENTIAL. SUBSTANTIA TE YOUR CLAIM WITH DOCUMENTARY EVIDENCE. D) YOU YOURSELF HAVE MENTIONED THAT YOU PURCHASED SHARE OF A PLOT WHEREAS SECTION 54F ENTAILS THE PURCHASE OF A RESIDENTIAL HOUSE. PLEASE SUPPORT YOUR CLAIM FOR THE APPLICABIL ITY OF SECTION 54F IN THE LIGHT OF ABOVE FACTS, WHEN DEDUCTION U/S 54F IS NOT AVAILABLE FOR PURCHASE OF A PLOT. E) PURCHASE DEED VIDE WHICH YOU HAVE PURCHASED THE SAID ASSET FROM YOUR BROTHER. F. IF PURCHASE HAS BEEN MADE BY ANY OTHER MODE, KI NDLY FURNISH THE SAID DOCUMENTARY EVIDENCE AND ALSO PRODUCE THE ORIGINAL FOR MY PERUSAL AS IT APPEARS THAT THE WORD CONSTRU CTED HAS BEEN ADDED AFTERWARDS IN THE AGREEMENT TO SELL FI LED DURING THE EARLIER ASSESSMENT PROCEEDINGS. PARA-4:- DURING THE SAID FINANCIAL YEAR, YOU BECAME OF THE SOLE PROP. OF THE FIRM M/S. K.B. CONCRETE FABS. YOU TOO K OVER ALL THE ASSETS OF THE FIRM INCLUDING A PLOT NO.190, IND USTRIAL AREA, PANCHKULA WHICH WAS LATER ON SOLD TO YOUR BROTHER. SH. HARGOBIND GOYAL FOR A SUM OF RS.48 LACS IN THE CAP ACITY OF THE PROPRIETOR, THUS SHOWING A CAPITAL GAIN OF RS. 33 LACS. PLEASE EXPLAIN AS TO WHY THE PROVISIONS OF SECTION 45(4) S HOULD NOT BE APPLIED IN THIS CASE AND THE SUM OF RS.48 LACS MIN US (COST OF CONSTRUCTION + COST OF INDEXATION) BE CHARGED AS CA PITAL GAIN IN THE HANDS OF THE FIRM. ALSO, IF SO BEING THE CASE, WHY SHOULD THE EXEMPTION U/S 54F W.R.T. SAID CAPITAL GAIN MAY NOT BE REVOKED AS THIS A AVAILABLE ONLY TO AN INDIVIDUAL/HUF AND N OT A FIRM. ITA NO.315(ASR)/2013 4 3. THE ASSESSEE SUBMITTED THE EXPLANATION TO THE SA ID LETTER, WHICH IS REPRODUCED IN AOS ORDER AT PAGES 3 & 4 AND FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: PARA-3: THAT S/SH. JIWAN PARKASH AND HARGOBIND GOY AL HAS PURCHASED PLOT NO.79, SECTOR 6, PANCHKULA JOINTLY A S CO-OWNERS AND HAVE MADE CONSTRUCTION THEREON JOINTLY, THOUGH THE MAJOR AMOUNT HAS BEEN SPENT BY SH. JIWAN PARKASH ON THE CONSTRUCTION OF HOUSE. TILL MAJOR AMOUNT HAS BEEN SPENT BY SH. JIWAN PARKASH ON THE CONSTRUCTION OF HOUSE. TILL 31.03.1995, SH.HARGOBIN D GOYAL HAS SPENT RS.70,512/- AND SH. JIWAN PARKASH HAS SPENT ONLY R S.17,900/- ON CONSTRUCTION OF HOUSE ON THE SAID PLOT. THEREAFTER, THE CONSTRUCTION EXPENSES WERE INCURRED BY SH.JIWAN PARKASH. IN VIEW OF ABOVE, IT IS CLEAR THAT BOTH THE CO-OWNERS HAVE CONSTRUCTED THE HOUSE JOINTLY THOUGH THE EXPENSES INCURRED BY ONE CO-OWNER IS ON THE HIGHER SIDE BUT IT WILL NOT EFFECT THAT SH.HARGOBIND GOYAL DOE S NOT HAVE ANY SHARE/INTEREST IN THE HOUSE CONSTRUCTED ON PLOT NO. 79, SECTOR 6, PANCHKULA. THE SAID HOUSE HAS BEEN SOLD THROUGH AN AGREEMENT TO SELL TO SH.JIWAN PARKASH ON CONSIDERATION AS SETTLED BY BOTH THE CO- OWNERS KEEPING IN VIEW THE EXPENDITURE INCURRED BY EACH CO-OWNER. IT IS FURTHER SUBMITTED AS UNDER TO SUBSTANTIATE OUR C LAIM FOR EXEMPTION U/S 54F WITH RESPECT TO THE FOLLOWING POINTS: A) PURCHASE FOR OTHER PART OF THE HOUSE FROM THE CO-OW NER IS ENTITLED FOR EXEMPTION U/S 54F AS HELD BY THAT HON BLE SUPREME COURT IN THE CASE OF CIT VS. T.N. ARAVINDA REDDY (1 979) 120 ITR 46. B) THERE IS NO DIVISION OF PLOT OR HOUSE BUT THE HOUSE IS OWNED BY BOTH S/SH. JIWAN PARKASH AND HARGOBIND GOYAL AS CO- OWNERS. C) AS EXPLAINED ABOVE, MERELY BECAUSE ONE OF THE CO-OW NER HAS SPENT MORE MONEY ON THE CONSTRUCTION OF HOUSE, DOES NOT EFFECT THAT THE OTHER CO-OWNER HAS NOT INTEREST IN THE HOU SE CONSTRUCTED ON THE PLOT. ITA NO.315(ASR)/2013 5 D) THESE ARE UNDISPUTED FACTS THAT IT IS A CONSTRUCTED HOUSE AS APPARENT FROM THE WEALTH TAX RETURN FILED BY BOTH T HE CO-OWNERS AND NECESSARY RECORD IS ALREADY ON RECORD. THEREFOR E, THE EXEMPTION U/S 54F HAS RIGHTLY BEEN CLAIMED. E) THE PURCHASE HAS BEEN MADE ONLY THROUGH AN AGREEMEN T TO SELL AND NO REGISTERED DEED HAS BEEN EXECUTED. F) AS EXPLAINED ABOVE AND OTHER MATERIAL PLACED ON REC ORD IN THE SHAPE OF WEALTH TAX RETURN, IT IS A CONSTRUCTED PLO T. AT THE TIME OF SALE/PURCHASE, GENERALLY WORD PLOT NO. IS USED . 4. THE AO VIDE PARA 3.3 HAS WITHDRAWN EXEMPTION CLA IMED U/S 54F OF THE ACT. THE SAID FINDING OF THE AO IN PARA 3.3 IS REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 3.3 THE REPLY OF THE ASSESSEE HAS DULY BEEN CONSI DERED. PERUSAL OF THE ASSESSMENT RECORD REVEALS THAT THE ASSESSEE HA S CLAIMED AN EXEMPTION OF RS.30,00,000/- U/S 54F OF THE ACT ON A CCOUNT OF PURCHASE OF HALF SHARE IN THE RESIDENTIAL PLOT NO.79, SECTOR 6, PANCHKULA FROM HIS BROTHER SH.HARGOBIND GOYAL ON 20.01.2006 FOR A CONSIDERATION OF RS.30,00,000/-. IT IS SEEN THAT THE ASSESSEE WAS AL READY OWNER OF HALF SHARE IN PLOT NO.79, SECTOR 6, PANCHKULA AND AS PER THE PROVISIONS OF SECTION 54F(10, THE EXEMPTION IS AVAILABLE IN THE C ASE OF PURCHASE/CONSTRUCTION OF A RESIDENTIAL HOUSE. AS PE R THE DETAILS AVAILABLE IN THE WEALTH TAX RETURN OF SH.HARGOBIND GOYAL FOR THE AY 2005-06, HE INCURRED TOTAL EXPENDITURE OF RS.70,51 2/- ONLY AS COST OF CONSTRUCTION ON HIS HALF SHARE OF THE SAID PLOT AND AS PER THE DETAILS AVAILABLE IN THE WEALTH TAX RETURN OF THE ASSESSEE FOR THE AY 2004-05, AN AMOUNT OF RS.36,17,312/- HAS BEEN SHOWN AS INCUR RED ON THE CONSTRUCTION OF HALF SHARE OF ABOVE SAID PLOT. FROM THE ABOVE, IT CAN SAFELY BE CONCLUDED THAT SUCH A VIDE DIFFERENCE IN THE COST OF CONSTRUCTION AND THE NOMINAL AMOUNT INCURRED FOR CO NSTRUCTION BY SH. HARGOBIND GOYAL, IS AN INDICATION THAT THE CONSTRU CTED AREA BELONGING TO SH. HARGOBIND GOYAL WAS NOT AN INDEPE NDENT CONSTRUCTED RESIDENTIAL HOUSE. IT ALSO APPEARS THAT THE WORD CONSTRUCTED HAS BEEN ADDED IN THE AGREEMENT TO SE LL AFTERWARDS, ENABLING THE ASSESSEE TO CLAIM EXEMPTION U/S 54F AS THE SAID ITA NO.315(ASR)/2013 6 EXEMPTION OTHERWISE WOULD NOT HAVE BEEN AVAILABLE F OR PURCHASING A PLOT. MOREOVER, THE ASSESSEE HIMSELF HAS MENTIONED THE WORD PLOT IN HIS RETURN WHILE CLAIMING EXEMPTION U/S 54F. FURTHE R, THERE IS NO EVIDENCE ON RECORD WHICH SHOWS THAT THERE WERE TWO SEPARATE HOUSES ON PLOT NO.79, SECTOR 6, PANCHKULA, ONE BELONGING T O SH.HARGOBIND GOYAL AND THE OTHER BELONGING TO THE ASSESSEE. THIS IS FURTHER STRENGTHENED THAT SUB-DIVISION IS NOT ALLOWED WITHI N THE BOUNDARY OF A SINGLE PLOT BY THE URBAN DEVLOPMENT AUTHORITIES. AL L THESE FACTS SHOW THAT THE ASSET PURCHASED BY THE ASSESSEE IS NOT AN INDEPENDENT RESIDENTIAL HOUSE BUT ONLY SHARE IN THE PLOT NO .79, SECTOR 6, PANCHKULA HAS BEEN PURCHASED AND FOR ALL PRACTICAL PURPOSES, THE ENTIRE PROPERTY WAS ALREADY OWNED BY THE ASSESSEE A ND SH.HARGOBIND GOYAL WAS A CO-OWNER IN NAME ONLY. THE CASE LAW REL IED UPON BY THE ASSESSEE IS NOT RELEVANT HERE AS IN THAT CASE, THE PROPERTY OF HUF WAS PARTITIONED AND ONE OF THE COPARCENER PURCHASED THE SHARE OF OTHER COPARCENERS AFTER THE PARTITION OF HUF, AND IN THIS WAY, PURCHASE OF NEW ASSET TOOK PLACE BUT IN THE CASE UNDER CONSIDER ATION, NO NEW ASSET WAS PURCHASED BY THE ASSESSEE. IN VIEW OF THE ABOV E, THE ASSESSEE IS NOT ENTITLED FOR CLAIM OF EXEMPTION OF RS.30,00,000 /- U/S 54F OF THE ACT WHICH HAS BEEN ALLOWED TO HIM AT THE TIME OF OR IGINAL ASSESSMENT. ACCORDINGLY, THE SAME IS WITHDRAWN. 5. THE LD. CIT(A) DELETED THE ADDITION MADE BY THE AO AND HELD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION U/S 54F OF THE AC T BY HOLDING THAT THE OBSERVATIONS OF THE AO ARE NOT CORRECT AS THERE IS NO DIVISION OF PLOT BUT IT IS A SINGLE UNIT OWNED BY BOTH THE CO-OWNERS. THOUGH O NE CO-OWNER HAS SPENT LESSER AMOUNT THAN THE AMOUNT SPENT BY THE OTHER CO -OWNER BUT OTHERWISE BOTH ARE HAVING SHARE EACH IN THE HOUSE CONSTRUCT ED ON PLOT NO.79, SECTOR 6, PANCHKULA, AS APPARENT FROM THE WEALTH TAX RETUR NS FILED BY BOTH THE CO- OWNERS IN THE EARLIER YEARS I.E. MUCH BEFORE THE DA TE OF TRANSFER OF HIS SHARE BY SH. HARGOBIND GOYAL TO ASSESSEE. THE LD. CIT(A) RELIED UPON THE ITA NO.315(ASR)/2013 7 DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF CIT VS. T.N. ARVINDA REDDY (1979) 120 ITR 46. 6. THE LD. JCIT (DR), MR. TARSEM LAL SUBMITTED THAT DURING THE COURSE OF HEARING OF THIS CASE ON 29.01.2015, SH.P.N.ARORA , ADVOCATE HAD RELIED UPON A JUDGMENT OF THE HONBLE GUJARAT HIGH COURT I N THE CASE OF CIT VS. CHANDANBEN MAGAN LAL REPORTED AT 245 ITR 182. IN TH E SAID DECISION, THE HONBLE GUJARAT HIGH COURT HAS NOT CONSIDERED THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SETH BANARSI DASS GUPT A VS. CIT REPORTED AT 166 ITR 783 WHERE THE HONBLE SUPREME COURT, HAS HE LD THAT A FRACTIONAL OWNER IS ENTITLED TO DEPRECIATION AND FOLLOWING THI S DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF ITO VS. RASIK LAL N. SATRA REPORTED IN 98 ITD 335 WHERE THE TRIBUNAL HAS HELD THAT A FRACTIONAL O WNER IS NOT ENTITLED TO EXEMPTION U/S 54F. THE LD. DR FURTHER STATED THAT I N THE AGREEMENT TO SELL, IT WAS THE PLOT WHICH HAD BEEN PURCHASED BY THE ASSESS EE AS IS OBVIOUS FROM LAST PARA OF PAGE 1 OF THE AGREEMENT TO SELL. THERE FORE, THERE WAS NO HOUSE PROPERTY WHICH WAS PURCHASED BY THE ASSESSEE. THERE FORE, HE PRAYED THAT THE APPEAL OF THE DEPARTMENT MAY KINDLY BE ALLOWED. 7. THE LD. COUNSEL FOR THE ASSESSEE, MR. P.N. ARORA RELIED UPON THE SUBMISSIONS MADE BEFORE THE AO THAT OF THE LD. CIT( A) AND THE DECISION OF ITA NO.315(ASR)/2013 8 THE LD. CIT(A). HE RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF CIT VS.T.N. ARVINDA REDDY (SUPRA) A ND THE DECISION OF THE HONBLE GUJRAT HIGH COURT, IN THE CASE OF CIT VS. C HANDANBEN MAGAN LAL, REPORTED IN (2000) 245 ITR 82 (GUJ.). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE DISALLOWANCE IN THE PRESENT CASE BY THE AO WAS MAINLY MADE ON THE PREMISE THAT THERE ARE TWO PORTIONS OF THE PLOT O NE BELONGING TO SH.HARGOBIND GOYAL AND OTHER TO THE ASSESSEE. THE A REA BELONGING TO SH.HARGOBIND GOYAL IS NOT A CONSTRUCTED HOUSE BUT P ETTY CONSTRUCTION HAS BEEN DONE, WHEREAS THE CONSTRUCTION HAS BEEN DONE BY THE ASSESSEE BY SPENDING HUGE AMOUNT. ACCORDINGLY, THE AO AT PAGE 4 5 OF HIS ORDER OBSERVED THAT NOMINAL AMOUNT INCURRED FOR CONSTRUCT ION BY SH.HARGOBIND GOYAL, IS AN INDICATION THAT THE CONSTRUCTED AREA W AS NOT BELONGING TO SH.HARGOBIND GOYAL, WAS NOT AN INDEPENDENT CONSTRUC TED RESIDENTIAL HOUSE AND ACCORDINGLY THERE WERE NOT INDEPENDENT TWO HOUS ES ONE BELONGING TO SH. HARGOBIND GOYAL AND OTHER BELONGING TO THE ASS ESSEE. THEREFORE, THE ASSET PURCHASED BY THE ASSESSEE IS NOT AN INDEPEND ENT RESIDENTIAL HOUSE BUT ONLY HALF SHARE IN PLOT NO.79, SECTOR 6, PANCHKULA AND FOR ALL PRACTICAL PURPOSES, THE ENTIRE PROPERTY WAS ALREADY OWNED BY THE ASSESSEE AND SH.HARGOBIND GOYAL WAS A CO-OWNER IN NAME ONLY. ITA NO.315(ASR)/2013 9 8.1. THE WEALTH TAX RETURNS WERE ON RECORD BEFORE T HE AO AS WELL AS BEFORE THE LD. CIT(A) WITH REGARD TO BOTH CO-OWNERS I.E. S H.HARGOBIND GOYAL AND THE ASSESSEE. THE CO-OWNER SH.HARGOBIND GOYAL HAS D ECLARED SHARE IN THE HOUSE CONSTRUCTED AT PLOT NO.79, SECTOR 6, PANCHKUL A AND ACCORDINGLY, THE ASSESSEE HAS DECLARED SHARE IN THE HOUSE CONSTRUC TED AT PLOT NO.79, SECTOR 6, PANCHKULA. IT IS UNDISPUTED FACT AND HAS NOT BEE N CONTROVERTED BY THE AO OR BY THE LD. DR DURING THE ARGUMENTS OR IN THE WRI TTEN SUBMISSION PLACED ON RECORD. THE DEPARTMENT, THEREFORE, HAS ACCEPTED IN THE WEALTH TAX RETURNS, THE HALF SHARE OF HOUSE CONSTRUCTED IN THE PLOT NO .79, SECTOR 6, PANCHKULA IN THE HANDS OF BOTH THE CO-OWNERS. THEREFORE, IN OUR VIEW THE AMOUNT SPENT BY ONE CO-OWNER IS LESSER AND BY OTHER CO-OWNER IS MO RE FOR MAKING THE DISPUTED HOUSE DOES NOT MAKE ANY DIFFERENCE. THE FI NDING OF THE AO THAT SH. HARGOBIND GOYAL IS THE CO-OWNER IN THE NAME OF CO -OWNER ONLY AND ACTUALLY PROPERTY IS OWNED BY THE ASSESSEE IN TOTO BEFORE THE SAID PURCHASE OF SHARE MENTIONED HEREINABOVE IS WITHOUT ANY BASIS AND ANY MATERIAL ON RECORD. IN FACT SH. HARGOBIND GOYAL IS THE CO-OWNE R OF THE HOUSE PROPERTY CONSTRUCTED IN THE PLOT NO.79, SECTOR 6, PANCHKULA OF HALF SHARE AND ACCORDINGLY, THE ASSESSEE WAS CO-OWNER OF THE HALF SHARE OF THE SAID PROPERTY. WHETHER HALF SHARE PURCHASED BY THE CO-O WNER CAN BE TREATED AS AN INVESTMENT LIABLE FOR EXEMPTION U/S 54F OF THE A CT, IS A QUESTION TO BE ITA NO.315(ASR)/2013 10 ANSWERED BY US. IN THIS REGARD, THE LD. DR, MR. TAR SEM LAL RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF SETH BANARSI DASS GUPTA VS. CIT REPORTED IN 166 ITR 783, WHICH WAS FO LLOWED BY THE ITAT (MUMBAI BENCH) IN THE CASE OF ITO VS. RASIK LAL N. SATRA REPORTED IN 98 ITD 335. FIRST OF ALL, WE DEAL WITH THE DECISION OF THE HONBLE SUPREME COURT, IN THE CASE OF SETH BANARSI DASS GUPTA VS. CIT (SUPRA). HOW THE SAID DECISION CAN BE MADE APPLICABLE TO THE PRESENT FACT S AND CIRCUMSTANCES OF THE CASE. THE RELEVANT FACTS AND THE DECISION IN TH E CASE OF SETH BANARSI DASS GUPTA VS. CIT (SUPRA) ARE REPRODUCED FOR THE SAKE O F CONVENIENCE AS UNDER: THIS APPEAL IS BY CERTIFICATE AND IS DIRECTED AGA INST THE JUDGMENT OF THE HIGH COURT OF ALLAHABAD. THE ASSESSEE AND HIS F IVE BROTHERS CONSTITUTED A HINDU JOINT FAMILY. THE RELEVANT ASSE SSMENT YEAR IS 1953-54, CORRESPONDING TO THE ACCOUNTING PERIOD END ING ON 30TH JUNE, 1952. THE JOINT FAMILY OWNED, INTER ALIA, A S UGAR FACTORY AT BIJNORE. IN 1930, THERE WAS A PARTITION IN THE FAMI LY AND THE MEMBERS OF THE ERSTWHILE JOINT FAMILY CONSTITUTED THEMSELVE S INTO A PARTNERSHIP FIRM WHICH TOOK OVER THE SUGAR FACTORY AND OPERATED THE SAME. IN THE YEAR 1944, SHEO PRASAD, ONE OF THE BROTHERS, WHO WA S A PARTNER OF THE FIRM INSTITUTED A SUIT IN THE LAHORE HIGH COURT FOR DISSOLUTION OF THE FIRM. PARTITION OF THE COUNTRY FOLLOWED AND AFTER T HE PARTIES SHIFTED OVER TO INDIA, A FRESH SUIT WAS INSTITUTED AT BIJNO RE FOR PURPOSES OF PARTITION. THE PROPERTIES WERE PUTIN CHARGE OF A RE CEIVER APPOINTED BY THE COURT. SO FAR AS THE SUGAR FACTORY WAS CONCERNE D, THE ARRANGEMENT WAS THAT AT FIVE YEARLY RESTS, AN AUCTI ON WAS TO BE HELD CONFINED TO THE PARTNERS AND THE HIGHEST BIDDER WOU LD BE GIVEN LEASE TO OPERATE THE FACTORY FOR THAT PERIOD UNDER THE RE CEIVER. ON 16TH JULY, 1948, SHEO PRASAD TRANSFERRED HIS 1/6 SHARE TO BANA RSI DASS AT A STATED VALUATION OF RS. 4,50,000. ON 3RD MAY, 1950, ANOTHER BROTHER, DEVI CHAND, LEASED OUT HIS 1/6TH SHARE TO BANARSI D ASS ON AN ANNUAL PAYMENT OF RS. 50,000. ON 13TH JULY, 1950, YET ANOT HER BROTHER, KANSHI RAM, SIMILARLY LEASED OUT HIS 1/6TH SHARE TO BANARSI DASS FOR ITA NO.315(ASR)/2013 11 A SIMILAR SUM. IN 1951, KANSHI RAM SUED FOR CANCELL ATION OF THE LEASE. ON 6TH APRIL, 1954, THE DISPUTE WAS COMPROMISED AND THE LEASE WAS TERMINATED. KANSHI RAM UNDERTOOK TO PAY TO BANARSI DASS AT THE RATE OF RS. 16,000 FOR THE FIRST THREE YEARS AND AT THE RATE OF RS. 10,000 FOR THE SUBSEQUENT TWO YEARS. DEVI CHAND'S 1/6TH SHARE WAS ALSO RETURNED ON MUTUAL ARRANGEMENT AND HE AGREED TO PAY A SUM OF RS. 39,000 ODD ANNUALLY TO BANARSI DASS FOR THE LEASE PERIOD. DURI NG THE ASSESSMENT PROCEEDINGS, THE NATURE OF THESE RECEIPTS CAME TO B E DEBATEDTHE ASSESSEE MAINTAINED THAT THESE WERE IN THE NATURE O F A CAPITAL RECEIPT IN LIEU OF THE LEASEHOLD INTEREST AND THE ITO MAINT AINED THAT THOSE WERE REVENUE RECEIPTS. IN DUE COURSE, THE TRIBUNAL ULTIMATELY UPHELD THE VIEW OF THE REVENUE. ONE MORE QUESTION THAT AROSE WAS THE ADMISSIBILITY OF A CLAIM OF EXPENDITURE BEING PAYMENT OF INTEREST ON A LOAN TAKEN FOR PURCHASE OF SHARES IN THE SUGAR FACTORY. THE ITO HAD ALLOWED THE CLAIM OF RS. 75,211. THE AAC GAVE NOTICE TO THE ASSESSEE AND DIS ALLOWED THE SAME. THE TRIBUNAL REVERSED THE FINDING OF THE AAC IN REG ARD TO THE ADMISSIBILITY OF THE CLAIM. THEN, THE ASSESSEE AS A LSO THE REVENUE APPLIED TO THE TRIBUNAL TO REFER THE CASE TO THE HI GH COURT. AS FAR AS RELEVANT, THE FOLLOWING QUESTIONS WERE REFERRED FOR THE OPINION OF THE HIGH COURT UNDER S. 66(1) OF THE ACT AT THE INSTANC E OF THE ASSESSEE : '(1) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE SUMS OF RS. 16,000 AND RS. 39,262 RECEIVED FROM KAN SHI RAM AND DEVI CHAND, RESPECTIVELY, WERE ASSESSABLE AS INCOME OF THE ASSESSEE ? (2) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, DEPRECIATION IS ALLOWABLE ON THE 1/6TH SHARE IN S.B . SUGAR MILLS, BIJNORE, WHICH THE ASSESSEE HAD ACQUIRED FROM SETH SHIV PRASAD ?' SO FAR AS THE FIRST QUESTION WAS CONCERNED, THE HIG H COURT REFERRED TO THE ARRANGEMENT ENTERED INTO BY THE PAR TIES AS ALSO THE TERMS OF COMPROMISE AND REFERRED TO CERTAIN DECISIO NS AND CAME TO THE CONCLUSION THAT THE SUM OF RS. 16,000 RECEIVED AS A PART OF THE TOTAL SUM OF RS.68,000 CONSTITUTED AN ASSESSABLE RE CEIPT. ON THE SAME REASONING, THE HIGH COURT HELD THAT THE AMOUNT OF R S. 39,262 RECEIVED FROM DEVI CHAND WAS ALSO LIABLE TO TAX. SO FAR AS THE OTHER QUESTION WAS CONCERNED, THE HI GH COURT HELD (1971) 81 ITR 170, 176 (ALL) : ITA NO.315(ASR)/2013 12 'THE QUESTION, HOWEVER, REMAINS WHETHER THE ASSESSE E IS ENTITLED TO CLAIM DEPRECIATION ON THE GROUND THAT IT HAS ACQUIR ED 1/6TH SHARE IN THE S.B. SUGAR MILLS. IT IS TO BE NOTED THAT THE AS SESSEE DOES NOT CLAIM TO BE FULL OWNER OF THE PROPERTY. ALL THAT THE ASSE SSEE CLAIMS IS 1/6TH SHARE IN S.B. SUGAR MILLS. THE ASSESSEE CLAIMS ALLOWANCE UNDER CL. (VI) OF SUB -S. (2) OF S. 10 OF THE INDIAN IT ACT, 1922. CLAUSE (VI) IS : IN RESPECT OF DEPRECIATION OF SUCH BUILDINGS,MACHI NERY, PLANT OR FURNITURE BEING THE PROPERTY OF THE ASSESSEE......' IN ORDER TO QUALIFY FOR AN ALLOWANCE UNDER CL. (VI) , THE ASSESSEE HAS TO MAKE OUT THAT THE BUILDING, MACHINERY, PLANT OR FUR NITURE IS THE PROPERTY OF THE ASSESSEE. MR. SHANTI BHUSHAN APPEAR ING FOR THE ASSESSEE URGED THAT CL. (VI) IS ATTRACTED EVEN WHER E AN ASSESSEE OWNS A FRACTIONAL SHARE IN THE MACHINERY. ON THE OTHER HAN D MR. BRIJ LAL GUPTA APPEARING FOR THE DEPARTMENT URGED THAT OWNER SHIP OF A FRACTIONAL SHARE IN MACHINERY DOES NOT ATTRACT CL. (VI). THE POINT IS NOT FREE FROM DIFFICULTY.' THE HIGH COURT ULTIMATELY CAME TO HOLD : 'IN ORDER TO QUALIFY FOR AN ALLOWANCE UNDER CL. (VI), THE CLAIMANT MUST MAKE OU T THAT THE MACHINERY IS THE PROPERTY OF THE ASSESSEE.THAT TEST IS NOT SATISFIED BY THE PRESENT ASSESSEE. THE ASSESSEE DOES NOT CLAIM T O BE THE FULL OWNER OF THE MACHINERY IN QUESTION. ALL THAT IS CLA IMED FOR THE ASSESSEE IS 1/6TH SHARE IN THE MACHINERY. SUCH A FR ACTIONAL SHARE WILL NOT SUFFICE FOR GRANTING AN ALLOWANCE FOR DEPRECIAT ION UNDER S. 10(2)(VI) OF THE ACT.' 8.2. THE HONBLE SUPREME COURT AFTER THE DECISION O F THE HONBLE HIGH COURT OF ALLAHABAD HELD AT PAGE 788 & 789, WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED HEREUNDER: THIS APPEAL IS BY CERTIFICATE FROM THE JUDGMENT OF THE ALLAHABAD HIGH COURT. THE ASSESSEE IS THE SUGAR MIL L WHICH DURING THE RELEVANT ASSESSMENT YEAR 1960-61 CORRESPONDING TO THE ITA NO.315(ASR)/2013 13 ACCOUNTING PERIOD ENDING 30TH JUNE, 1959, WAS IN TH E HANDS OF A COURT RECEIVER. THE SUGAR MILL WAS BEING ASSESSED A S AN AOP. BANARSI DASS, A PARTNER, HAD 1/6TH SHARE THEREIN. H E HAD ACQUIRED UNDER A DEED OF EXCHANGE DT. 16TH JULY, 1948, 1/6TH SHARE OF SHEO PRASAD IN EXCHANGE OF SHARES HELD BY BANARSI DASS I N LORD KRISHNA SUGAR MILLS VALUED AT RS. 4,50,000. IN THIS ASSESSM ENT YEAR, THE RECEIVER CLAIMED THAT FOR THE PURPOSES OF COMPUTING THE DEPRECIATION ALLOWANCE, THE WRITTEN DOWN VALUE OF THE BUSINESS A SSETS BE ENHANCED SO AS TO REFLECT THE SUM OF RS. 4,50,000 IN PLACE O F 1/6TH SHARE REPRESENTING THE SHARE OF SHEO PRASAD. SIMILAR CLAI M HAD BEEN RAISED BY BANARSI DASS IN HIS OWN ASSESSMENT. THE ITO REJE CTED THE CLAIM AND SUCH REJECTION HAS BEEN UPHELD THROUGHOUT. WE H AVE ALREADY TURNED DOWN THE CLAIM OF BANARSI DASS. THIS CLAIM H AS, THEREFORE, TO BE REJECTED. WE MAY ADDITIONALLY POINT OUT THAT UND ER THE SCHEME OF THE ACT, IT IS THE ASSESSEE WHO ALONE IS ENTITLED T O MAINTAIN SUCH CLAIM OF DEPRECIATION AND IT WOULD INDEED BE DIFFICULT, W ITHIN THE FRAMEWORK OF THE SCHEME CONTAINED IN THE STATUTE, TO MAINTAIN A SEPARATE VALUE OF A PART OF THE ASSET TO WORK OUT DEPRECIATION. THE B OOK VALUE AS SHOWN MUST BE APPLICABLE TO THE ENTIRE ASSETS OF THE FIRM INCLUDING THE 1/6TH SHARE WHICH SHEO PRASAD HAD GIVEN TO BANARSI DASS. THE CLAIM HAS RIGHTLY BEEN REJECTED IN THE FORUMS BELOW INCLUDING THE HIGH COURT. THE APPEAL HAS NO MERIT AND IS DISMISSED. PARTIES W ILL BEAR THEIR OWN COSTS. 8.3 FROM THE READING OF THE JUDGMENT IN THE CASE OF SETH BANARSI DASS GUPTA VS. CIT (SC) (SUPRA), WE ARE OF THE VIEW THAT THE HONBLE SUPREME COURT WHILE CONFIRMING THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT HAS HELD THAT IN ORDER TO QUALIFY ALLOWANCE OF DE PRECIATION, THE ASSESSEE HAS TO MAKE OUT THAT MACHINERY IS THE PROPERTY OF THE A SSESSEE AND THE ASSESSEE DOES NOT CLAIM TO THE FULL OWNERSHIP OF THE MACHINE RY IN QUESTION. ALL THAT IS CLAIMED FOR THE ASSESSEE IS 1/6 TH SHARE IN THE MACHINERY. SUCH A FRACTIONAL SHARE WILL NOT SUFFICE FOR GRANTING AN ALLOWANCE FO R DEPRECIATION UNDER ITA NO.315(ASR)/2013 14 SECTION 10(2)(VI) OF THE ACT. IT IS WITH THIS BACKG ROUND THAT FRACTIONAL MACHINERY OWNED BY A PERSON CANNOT BE SUBJECT MATTE R OF ALLOWANCE OF DEPRECIATION, WHEREAS IN THE PRESENT CASE FACTS ARE DIFFERENT AND CANNOT BE MADE APPLICABLE IN THE PRESENT FACTS AND CIRCUMSTAN CES OF THE CASE. 8.4. AS REGARDS THE DECISION IN THE CASE OF ITO VS. RASIKLAL N. SATRA (SUPRA) DECIDED BY THE ITAT, MUMBAI BENCH, IS WITH RESPECT TO THE PROVISO UNDER SECTION 54F OF THE ACT, WHERE THE ASSESSEE IS NOT ENTITLED TO EXEMPTION ON ACCOUNT OF PURCHASE HOUSE U/S 54F OF THE ACT, IF ASSESSEE ALREADY OWNS MORE THAN ONE RESIDENTIAL HOUSE ON THE DATE OF TRAN SFER OF A NEW ASSET. IN THE CASE OF SHRI RASIKLAL N.SATRA (SUPRA), THE ASSESSEE WAS CO-OWNER OF FLAT IN MUMBAI AND THEREFORE, ON THIS PREMISE IT WAS HELD B Y THE ITAT, MUMBAI THAT ASSESSEE WAS NOT CO-OWNER OF THE RESIDENTIAL H OUSE ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THE FACTS IN THE CA SE OF SHRI RASKILAL N. SATRA (SUPRA) ARE DIFFERENT TO THE PRESENT FACTS AND CIRC UMSTANCES OF THE CASE AND THEREFORE, THE SAME IS ALSO NOT APPLICABLE. 8.5. AS REGARDS THE ARGUMENTS MADE BY THE LD. DR AT PAGE 1 OF THE AGREEMENT TO SELL, IT HAS BEEN REFERRED AS PLOT NO . AND THEREFORE, IT IS NOT A HOUSE. SUCH MENTIONING OF THE PLOT AT PAGE 1 OF THE AGREEMENT TO SELL BETWEEN TWO-OWNERS DOES NOT PROVE WEALTH TAX RETUR N AS WRONG, WHICH HAVE BEEN ACCEPTED BY THE DEPARTMENT WHERE BOTH THE CO-O WNERS HAVE DECLARED ITA NO.315(ASR)/2013 15 THE HOUSE AS CO-OWNED IN THEIR RESPECTIVE WEALTH TA X RETURNS. IT IS A UNDISPUTED FACT ON RECORD BEFORE BOTH THE AUTHORITI ES BELOW. THEREFORE, THIS ARGUMENT AND SUBMISSION OF THE LD. DR CANNOT HELP T HE REVENUE AND IS REJECTED. 8.6. MOREOVER, AS AGAINST THE DECISION OF THE ITAT MUMBAI BENCH, IN THE CASE OF RASIKLAL N. SATRA (SUPRA), THE LD. COUNSEL FOR THE ASSESSEE HAS THE BENEFIT OF THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF CIT VS. T.N. ARAVINDA REDDY (1979) 120 ITR 46, WHERE THE F ACTS OF THE CASE ARE THAT FOUR BROTHERS, MEMBERS OF A COPARCENARY, PART ITIONED THEIR FAMILY PROPERTIES. THE ELDEST BROTHER SOLD HIS OWN HOUSE AND ACQUIRED THE COMMON HOUSE FROM THE REST OF THE THREE BROTHERS WHO EXECU TED THREE RELEASE DEEDS FOR A CONSIDERATION OF RS.30,000/- EACH, ADJUSTED TOWARDS THE EXTRA SHARE (JESHTABHAGA) AGREED TO BE GIVEN TO THE ELDEST BY THE NEXT THREE. THE QUESTION AROSE BEFORE THE HONBLE SUPREME COURT WHE THER THESE RELEASE DEEDS DID AMOUNT TO PURCHASE OF THE HOUSE U/S 54F O F THE ACT, WHEREAS THE HONBLE HIGH COURT, HAS ANSWERED IN FAVOUR THAT IT IS A PURCHASED HOUSE U/S 54F OF THE ACT AND EACH RELEASE DEED IS A TRANSFER OF REALSORS SHARE FOR CONSIDERATION TO THE RELEASEE. IT WAS HELD BY THE H ONBLE SUPREME COURT THAT HAD THIS BEEN TAKEN FROM NON-FRATERNAL OWNERS OF SH ARES OR FROM ONE STRANGER-OWNER, PLAIN SPOKEN PEOPLE WOULD HAVE CALL ED IT A PURCHASE. WHY, ITA NO.315(ASR)/2013 16 SHOULD LEGALESE BE ALLOWED TO PLAY THIS LINGUISTIC DISTORTION? THE HONBLE COURT, RELIED UPON THE ENGLISH DECISION IN THE CASE OF UPJOHN J., IN BOBSHAW BROTHERS LTD. VS. MAYER (1956) 3 ALL ER 833, 835. 8.7. THE SAID DECISION OF THE HONBLE SUPREME COURT , IN THE CASE OF CIT VS. T. N. ARVINDA REDDY (SUPRA) IS APPLICABLE IN TH E PRESENT FACTS AND CIRCUMSTANCES OF THE CASE AND OUR DECISION HEREINAB OVE. IN THE PRESENT CASE ALSO THERE IS ONE CO-OWNER, THE ASSESSEE HAS PURC HASED A HOUSE FROM THE OTHER CO-OWNER, HIS OWN BROTHER AND THEREFORE, THE ASSESSEE IS ENTITLED TO THE BENEFIT U/S 54F OF THE ACT. 8.8. RELIANCE HAS ALSO BEEN PLACED BY THE LD. COUNS EL FOR THE ASSESSEE IN THE CASE OF CIT VS. CHANDANBEN MAGAN LAL (GUJ) (SUPRA), WHERE THE FACTS OF THE CASE ARE AS UNDER: THE LEGISLATURE HAS PROVIDED THAT IF THE HOUSE PRO PERTY WHICH IS SOLD WAS USED FOR RESIDENTIAL PURPOSE BY THE ASSESSEE OR HIS PARENT AND FROM THE LONG-TERM CAPITAL GAIN EARNED ANOTHER HOUS E PROPERTY IS PURCHASED FOR THE ASSESSEES RESIDENCE, SUBJECT TO THE PROVISIONS OF THE SECTION, THE CAPITAL GAIN SHOULD NOT BE TAXED. WHEN THE ACT ENABLES AN ASSESSEE TO GET EXEMPTION FROM PAYMENT OF TAX IN RE SPECT OF PURCHASE OR CONSTRUCTION OF A RESIDENTIAL HOUSE, PURCHASE OR CONSTRUCTION OF A PORTION OF THE HOUSE, SHOULD ALSO ENABLE THE ASSESS EE TO CLAIM THE EXEMPTION. IT IS POSSIBLE THAT A PERSON MAY NOT BE IN A POSITION TO PURCHASE THE WHOLE RESIDENTIAL HOUSE AT A TIME AND IN THE CIRCUMSTANCES AN ASSESSEE MIGHT PURCHASE A PORTION OF THE HOUSE OR MORE INTEREST IN THE SHARE IN THE HOUSE. IN THE INS TANT CASE, 15 PER CENT OF UNDIVIDED SHARE IN THE HOUSE PROPERTY WAS P URCHASED BY THE ASSESSEE FROM HER HUSBAND AND HER SON. IT IS A SETT LED LEGAL POSITION 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 ITA NO.315(ASR)/2013 17 CAN HARMONISE WITH THE SUBJECT OF THE ENACTMENT AND THE OBJECT WHICH THE LEGISLATURE HAS IN VIEW. IN VIEW OF THE SAID PR INCIPLE, IT IS VERY CLEAR THAT WHEN THE LEGISLATURE HAS DESIRED TO GIVE EXEMPTION TO AN ASSESSEE WHO IS SELLING HIS RESIDENTIAL HOUSE SO AS TO PURCHASE ANOTHER RESIDENTIAL HOUSE, ONE CANNOT INTERPRET THE PROVISI ON IN A MANNER WHICH WOULD DISENTITLE THE ASSESSEE TO CLAIM THE E XEMPTION UNDER THE SECTION MERELY BECAUSE THE ASSESSEE COULD NOT PURC HASE THE RESIDENTIAL HOUSE IN TOTO AND THE ASSESSEE PURCHASE D ONLY A PORTION OF THE HOUSE. IN THE CIRCUMSTANCES, THE TRIBUNAL WAS R IGHT WHEN IT CAME TO THE CONCLUSION THAT MERELY BECAUSE THE ASSESSEE HAD PURCHASED 15 PER CENT OF UNDIVIDED SHARE IN A RESIDENTIAL HOUSE , THE ASSESSEE CANNOT BE DISENTITLED FROM MAKING A CLAIM FOR EXEMP TION UNDER THE PROVISIONS OF SECTION 54.- CIT VS. TIKYOMAL JASANMA L (1971) 82 ITR 95 (GUJ.): TC 22R.261 APPLIED. SIMPLY BECAUSE THE ASSESSEE WAS RESIDING IN A RESID ENTIAL HOUSE WHICH WAS PURCHASED BY THE ASSESSEE, THE REVENUE CANNOT B E PERMITTED TO SAY THAT THE ASSESSEE CANNOT CLAIM EXEMPTION UNDER THE PROVISIONS OF S. 54. SEC.54 NOWHERE STATES THAT A RESIDENTIAL HOU SE WHICH IS PURCHASED BY THE ASSESSEE SO AS TO ENABLE THE ASSES SEE TO GET EXEMPTION UNDER THE PROVISION OF S. 54 SHOULD NOT B E THE ONE IN WHICH THE ASSESSEE WAS RESIDING. IT WOULD BE ABSURD TO GI VE SUCH AN INTERPRETATION SO AS TO DISENTITLE AN ASSESSEE F ROM GETTING AN EXEMPTION IF THE ASSESSEE PURCHASES THE HOUSE PROPE RTY WHEREIN HE WAS RESIDING PRIOR TO THE PURCHASE. WHEN THE SECTIO N DOES NOT PUT ANY SUCH EMBARGO, IT WOULD BE ABSOLUTELY AGAINST THE SE TTLED PRINCIPLES OF INTERPRETATION OF STATUTE TO READ SUCH AN INTENTION OF THE LEGISLATURE SO AS TO DEPRIVE AN ASSESSEE FROM GETTING AN EXEMPTION UNDER THE PROVISIONS OF S. 54. IN SUCH A CASE, IF THERE IS A BONA FIDE PURCHASE, THE REVENUE CANNOT BE PERMITTED TO SAY THAT THE A SSESSEE IS NOT ENTITLED TO EXEMPTION UNDER THE PROVISIONS OF S. 5 4 MERELY BECAUSE THE ASSESSEE WAS RESIDING IN THE HOUSE WHICH WAS PURCHA SED BY THE ASSESSEE. IN THE INSTANT CASE, IT IS AN ADMITTED F ACT THAT THE ASSESSEE HAD PURCHASED INTEREST IN THE HOUSE PROPERTY WHICH WAS ALSO USED BY HER FOR RESIDENCE. WHAT ONE HAS TO SEE IS WHETHER A RESIDENTIAL HOUSE HAS BEEN PURCHASED. IT IS IMMATERIAL WHETHER THE A SSESSEE WAS USING THE SAID HOUSE BEFORE IT WAS PURCHASED BY THE ASSES SEE. AS THE SECTION IS SO CLEAR AND AS THE SECTION DOES NOT PUT ANY EMB ARGO, THE VIEW EXPRESSED BY THE ITO THAT THE ASSESSEE WAS NOT ENT ITLED TO EXEMPTION BECAUSE SHE PURCHASED INTEREST IN THE PROPERTY WHIC H WAS BEING USED ITA NO.315(ASR)/2013 18 BY HER AS HER RESIDENCE PRIOR TO THE PURCHASE CANN OT BE ACCEPTED. THE TRIBUNAL HAS RIGHTLY SET ASIDE THE SAID FINDING BY COMING TO THE CONCLUSION THAT THE ASSESSEE WAS ENTITLED TO EXEMPT ION THOUGH THE SAID RESIDENTIAL HOUSE WAS USED BY HER AS HER RESIDENCE ALONG WITH HER FAMILY MEMBERS BEFORE INTEREST IN THE SAID PROPERTY WAS PURCHASED BY HER SO AS TO AVAIL EXEMPTION UNDER THE PROVISIONS O F S. 54. CONCLUSION: PURCHASE OF A PORTION OF THE HOUSE PROPERTY OR SOME INTEREST IN THE HOUSE PROPERTY IS SUFFICIENT FOR CLAIMING EXEMPTION U/S 54; SIMPLY BECAUSE ASSESSEE WAS RESIDING IN THE RESIDENTIAL HO USE WHICH WAS PURCHASED BY HER EVEN BEFORE THE PURCHASE CLAIM FOR EXEMPTION CANNOT BE DENIED. 8.9. THE SAID DECISION OF THE HONBLE GUJRAT HIGH C OURT, IN THE CASE OF CIT VS. CHANDANBEN MAGAN LAL, IS APPLICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE SINCE IN THE PRESENT CASE , THE ASSESSEE HAD PURCHASED THE HOUSE FROM HIS BROTHER THE CO-OWNER O F THE HOUSE AND THEREFORE, IS ENTITLED TO EXEMPTION U/S 54F OF THE ACT. THE ARGUMENT OF THE LD. DR THAT HONBLE GUJRAT HIGH COURT (SUPRA) HAS NOT CONSIDERED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SETH BANARSI DASS GUPTA (SUPRA) HAS NO RELEVANCE AND CANNOT HELP THE REVENUE IN VIEW OF OUR FINDINGS HEREINABOVE. IN THE FACTS AND CIRCUMSTANCE S OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) W HO HAS RIGHTLY DELETED THE DISALLOWANCE/DEDUCTION MADE U/S 54F OF THE ACT BY T HE AO. THUS, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.314(ASR)/2013 IS DISMISSED. ITA NO.315(ASR)/2013 19 ORDER PRONOUNCED IN THE OPEN COURT ON 19TH F EBRUARY, 2015. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19TH FEBRUARY, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.JEEWAM PARKASH, BATHINDA. 2. THE ITO WARD 1(1), BATHINDA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.