Urgent- Exemption under 54F

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apoorva (Querist)
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08 May 2009 1. Can a person avail exemption under section 54F if he invests in a residential house property by selling the shares held by him?

[a]what if he is already in possession of more than one property which is put into commercial use and income of such properties is being chargeable under the head 'Income From House Property'.?

[b]If Yes, could u refer please me a case law w.r.t such decision?

[c]if No, kindly substantiate.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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10 May 2009 1)Yes.
2)No.
It is mentioned in 54F itself that the assessee should not own more than one property for claiming the exemption.

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apoorva

apoorva (Querist)
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11 May 2009 Thank you for the reply.

apoorva

apoorva (Querist)
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11 May 2009 the proviso for sub section 1 states:-
(a) the assessee,
(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or
(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or
(iii) Constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and

so in my question the properties are put into commercial use, can the assessee avail the benefit?

In the meanwhile i found a case law, Commissioner of Income Tax vs. Ouseph Chacko, 271 ITR 29 pertaining to my question.

Kindly advise.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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11 May 2009 Ownership is the main criteria and not the use.

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