Non-eligibility of Deduction u/s 54F of IT Act on Ground of Co-ownership more than one Residential Property: ITAT directs Re-adjudication [Read Order]

The Mumbai bench of Income Tax Appellate Tribunal ( ITAT) directed re-adjudication to the assessing officer for the mon eligibility of deduction under section 54F of Income Tax Act,1961 due to co-ownership more than one residential property.

Zainul Abedin Ghaswala, the appellant assessee was an individual and filed return of income for the year under consideration for declaring total income. The  Assessing Officer disallowed the claim of the assessee for deduction under section 54F of the Income Tax Act,1961 against the capital gain on transfer of long term capital assets.

Thus the assessee appealed against the order passed by the commissioner of Income Tax (Appels) for confirming the decision of the assessing officer for dismissing the claim of deduction under section 54F of Income Tax Act.

Sunil M. Makhija, the counsel for the assessee contended that the joint ownership of the property would not stand in the way of claiming exemption under Section 54F of the Income Tax Act.

A.N. Bhalekar, the counsel for the revenue contended that the assessee owned six residential house properties though jointly , therefore the conditions mentioned in section 54F of the Income Tax Act are not fulfilled in this case was not eligible for exemption under section 54F of the Income Tax Act.

The two member bench comprising of Om Prakash Kant (Accountant) and Kavitha Rajagopal (Judicial) held that based on various decisions there was no material to show that assessee was exclusively owner of the other five residential properties/flats which are occupied by the other family members and the assessee was eligible for the deduction under section 54F of Income Tax Act while allowing the appeal filed by the assessee.

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