PRITAM H DADLANI Vs. INCOME TAX OFFICER
LAWS(IT)-1989-1-9
INCOME TAX APPELLATE TRIBUNAL
Decided on January 16,1989

Appellant
VERSUS
Respondents

JUDGEMENT

R.D. Agrawala, Judicial Member - (1.)IN this appeal, preferred by the assessee, wherein 8 grounds have been taken, the controversy centres round the admissibility to the exemption under Section 54(1) of the INcome-tax Act, 1961 (referred as Act for brief) in view of the fact that the residential flat sold by Mm with regard to the sale proceeds of which the exemption is claimed is situated at Bombay while he was carrying on his business and residing at Hyderabad and secondly, that the new flat annexed by the assessee from the sale proceeds of the Bombay flat was not registered in his name within the stipulated period of one year.
(2.)Relevant facts which are not disputed are these : The assessee together with his late mother purchased a flat at Bombay for Rs. 75,000 during the year 1968. The assessee's mother died during June 1978. This flat was sold by the assessee during January 1981 for a sum of Rs. 2,58,000. An agreement to purchase a flat at Hyderabad was entered into by the assessee during October 1980. Out of total consideration of Rs. 1,60,000 a sum of Rs. 1,47,500 was paid in instalments between October 1980 to November 1981. Last instalment of Rs. 12,500 was paid during November 1982 and the sale deed executed a year after, i.e., in November 1983. The Department computed the capital gain at Rs. 1,38,750 in respect of which the assessee claimed exemption under Section 54(1) of the Aot.
At the assessment stage, the Income-tax Officer disallowed the exemption on the sole ground that the Bombay flat was not occupied by the assessee continuously as during this very period he was carrying on his business as well residing at Hyderabad. The plea raised by the assessee that whenever he used to go to Bombay in connection with his business or meet relatives he stayed in this flat was not accepted by the Income-tax Officer to take the view that it could amount to continuous living of the assessee. The Income-tax Officer placed reliance on two decisions viz., M, Viswanathan v. CIT [1979] 117 ITR 244 (Mad.) and Smt. Vijayalakshmi v. CIT [1975] 100 ITR 648 (Kar.) in support of his finding1.

(3.)THE assessee appealed. THE, learned Commissioner (Appeals) assigned one another reason in negativing the assessee's plea of exemption by holding that the flat at Hyderabad was not purchased by him within one year of the date of the sale of the Bombay flat.


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.