Full Judgment
S.R. Chauhan, J.M.
This appeal by revenue for assessment year 1991-92 is directed against the order of Commissioner (Appeals), Jodhpur, dated 10-1-1994.
2. I have heard the arguments of both the sides and also perused the records.
3. The revenue has raised the sole ground disputing the learned Commissioner (Appeals)'s impugned order in allowing benefit of exemption from tax under section 53 in respect of sale proceeds of the residential house sold by assessees. The learned Departmental Representative of revenue has contended that the assessing officer had included Rs. 39,721 as capital gain arising from the sale of residential house but the learned Commissioner (Appeals) deleted the addition allowing benefit of exemption under section 53 of the Income Tax Act. He has contended that the assessee having another house at Faridabad was not entitled to exemption in view of proviso to section 53, which provided that the exemption will not be available, if the assessee owns any other residential house on the date of transfer, wherefrom the capital gain arises. He has contended that the possession of the house at Faridabad was with assessee and so assessing officer had rightly rejected the assessee's claim for exemption. He has supported the assessing officer's order.
4. As against the above, the learned authorised representative of assessee has contended that the proviso to section 53 of Income Tax Act excludes the exemption only when the assessee 'owns' any other residential house. He has contended that in the instant case though possession of the house at Faridabad was with assessee but the Haryana Housing Board still remains the owner of the house and not the assessee. He has cited CIT v. Sirehmal Nawalakha (2001) 169 CTR (SC) 493.
5. In rejoinder, the learned Departmental Representative of revenue has contended that even a situation where possession has been handed over to the purchaser in compliance of contract of sale, the purchaser is deemed to be owner on the basis of part-performance of the contract of sale. He has contended that the decision cited by learned authorised representative of assessee is distinguishable on facts and that a registration may be necessary for gift but for the purposes of section 53 part-performance is enough. On this, the learned authorised representative of assessee has contended that section 2(47) of Income Tax Act defines transfer, and the term 'transfer' under the said provision also includes part -performance, but the term used in the proviso to section 53 is 'owns' and not transfer.
6. I have considered the rival contentions, relevant material on record and the cited decisions. The cited decision, is in the matter of gift and in the decision, a mere declaration of donation of outhouse was held as not constituting gift for the reason that section 123 Transfer of Property Act (TPA) provided that a gift of immovable property must be effected by a registered instrument and that in the cited case there was no registered instrument of gift. Obvious as it is the aforesaid decision is in the context of specific provision of section 123 TP Act in the matter of gift. At the same time, I do not find substance in the contention of the learned Departmental Representative of revenue also for the reason that section 2(47), embracing within its fold the situation of part-performance referred to in section 53A of T.P. Act defines the term 'Transfer', in relation to capital asset, but the term, to be considered for the purpose in hand, is 'owns' used in the proviso to section 53 of the, Income Tax Act, and not the term 'transfer'. In the circumstances, the analogy of a deemed transfer by way of part-performance of a contract as provided in section 53A. TP Act will not apply in the matter under consideration inasmuch as the said proviso contemplates 'owner' as such and not 'transfer', which may encompass deemed transfer as well. In the instant case, as the assessee has taken possession of house at Faridabad on hire-purchase basis and on the date of transfer of the house. in question wherefrom the capital gain has resulted and in respect of which the assessee has sought exemption under section 53 Income Tax Act, is not established to have been owned by assessee inasmuch as the ownership still 'vested in the Haryana Housing Board and not in the assessee. In that view of the matter. I find no mistake in the impugned order of the learned Commissioner (Appeals) in according benefit of exemption under section 53 Income Tax Act to the assessee. I, therefore, decline to interfere with the same.
7. In the result, this appeal of revenue is dismissed.