Section 54F exemption cannot be disallowed even if property is jointly owned by assessee

IN THE INCOME TAX APPELLATE TRIBUNAL

The Relevant Text of the Order as follows :

8.8.4. Judgment of Hon’ble Madras High Court in the case of Dr. Smt. P.K. Vasanthi Rangaraj vs., CIT (supra), in which the Hon’ble High Court held as under :

“Joint ownership of a second property is no bar to exemption on transfer of individual property – Merely because assessee jointly owned another property on date of transfer of asset, its claim for exemption under section 54F could not be rejected in respect of capital gains earned from transfer of her individual property.”

8.9. Considering the facts of the case in the light of above Judgments it is clear that assessee was having only 50% share in the impugned residential property which was sold to the son of the assessee. Therefore, the above Judgments squarely apply to the facts and circumstances of the case and A.O. cannot deny exemption under section 54F of the I.T. Act, 1961, to the assessee. The alternate contention of Learned Counsel for the Assessee is allowed. Considering the above discussion, we are of the view that assessee has genuinely transferred the impugned property in Malibu Town, Sohna Road, Gurgaon, to his son and satisfied the conditions of Section 54F of the I.T. Act.

Section 54F exemption cannot be disallowed even if property is jointly owned by assessee

Thus, assessee would be entitled for exemption/deduction under section 54F of the I.T. Act. In view of the above, we set aside the Orders of the authorities below and delete the addition and direct the A.O. to allow exemption under section 54F of the I.T. Act to the assessee. In view of the above the other contentions of assessee regarding use of the impugned property for commercial purpose and consequential grounds are left with academic discussion only. We do not propose to decide the same. Ground No.1 of the appeal of the Assessee is allowed.