surbhikocher (nothing) (24 Points)
31 July 2014
CA Ramsai N
(Fresher)
(594 Points)
Replied 31 July 2014
The intention of the legislature in introducing sec. 54F as explained in Board’s Circular No.346 dated 30 th June, 1982 is for encouraging house construction. It is an encouragement given to the assessee to exchange one of the residential houses for another or where he has none to convert any of his long term assets into a residential house. The object behind such a provision is to encourage large scale house building activity or investment in house property to meet acute housing shortage in the country. Therefore, looking at the legislative intent, a liberal interpretation has to be given to section 54F which is a beneficial provision.
Hon’ble Madras High court in the case of CIT vs. V. Natarajan (2006) 287 ITR 271. The ITAT, Madras Bench in the case reported in 33 TTJ 466 while considering a case of identical nature where the assessee purchased the property in the name of his wife and claimed exemption u/s 54 held that the assessee is entitled to exemption u/s 54 of the Act
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