July 2019

Section 54F Capital gains Investment in residential house Flat was owned by a co-operative housing society on a piece of land which was granted under a long-term lease Eligible for deduction

Ajay R. Singh
Advocate

10  Pr. CIT-23 vs. Jaya Uday Tuljapurkar [Income tax appeal No. 53 of 2017; dated 22nd April, 2019 (Bombay High Court)]

 [ACIT vs. Jaya Uday Tuljapurkar; dated 28th September, 2015; Mum. ITAT]

 

Section 54F Capital gains Investment in residential house Flat was owned by a co-operative housing society on a piece of land which was granted under a long-term lease Eligible for deduction

 

The assessee, an individual, was a joint owner of a residential property in the nature of a flat. He had received the said property under a Will dated 15th October, 2006 made by his father. The flat complex was owned by a co-operative housing society on a piece of land which was granted under a long-term lease. The father of the assessee was a member of the said society and owned the flat. After his death, the assessee received half a share, the other half going to his mother. These co-owners sold the flat under a registered deed dated 18th July, 2008 for a sale consideration of Rs. 23 crores. The assessee, after the sale of the flat, invested a part of the sale consideration of Rs. 2.89 crores in the purchase of a new residential unit. In his return of income filed for the A.Y. 2009-2010, he had shown the sale consideration of Rs. 11.50 crores which was his share of the sale proceeds by way of capital gain. He claimed the benefit of cost indexation and also claimed exemption of the sum of Rs. 2.89 crores while computing his capital gain tax liability in terms of section 54 of the Act.

 

The assessing officer (AO) rejected his claim on the ground that the assessee had not transferred the building and the land appurtenant thereto. In the opinion of the AO, since this was a pre-condition for application of section 54 of the Act, the assessee was not entitled to the benefit of exemption as per the s

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