Disallowance of exemption u/s54 of the it act,1961

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Avinash Joshi (Querist)
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11 May 2015 Disallowance of exemption claimed u/s54 of the ITAct,1961.
Assessee has claimed exemption u/s 54 of the ITAct,1961, by investing ₹1crore in a residential flat developed by the developer on the sold residential house property wherein the Assessee had 20%undivided share .The Long term capital gain on transfer of house property thus invested in residential flat allotted by the developer.The learned Assessing Officer has refused exemption u/s 54 on the contention that the Assessee was not absolute owner of the house property sold to the developer.In his opinion the exemption is not available to the coowner of house property. This is a new concept for me.Kindly share your views.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 May 2015 absolute/exclusive owneship is not required. however, ownership should be established through documentation ie there should be a proof of ownership whether joint or exclusive dont matter

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Avinash Joshi

Avinash Joshi (Querist)
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11 May 2015 The learned ITO is not disputing ownership,however he is of the opinion that coowner is not an absolute owner.Primafacie, it appears that the concept is itself innovative,kindly enlighten me whether any case law is there holding his concept correct.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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11 May 2015 honestly, have not heard of any such case. Joint ownership is no bar for claiming any exemption under section 54 or similar sections....

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