DCIT Vs Ajay Goel (ITAT Delhi)
Joint Ownership not equal to Full Ownership – Co-Ownership Not a Bar for Section 54F – Section 54F Allowed Despite Multiple Houses in Family Settlement
Delhi Bench ITAT has dismissed Revenue’s appeal & upheld relief granted to Assessee for AY 2020–21, affirming his eligibility for exemption u/s 54F despite co-ownership in a property & also allowing indexed cost of acquisition of shares.
Assessee, an individual, filed his return of income at ₹12.50 crore. During the relevant year, he sold 74,024 shares of Tirupati Medicare Ltd. for ₹17.50 crore, resulting in a declared long-term capital gain (LTCG) of ₹15.96 crore after claiming indexed cost of acquisition of ₹1.54 crore. Out of the gains, he invested in a residential apartment & claimed deduction of ₹3.68 crore under Section 54F.
AO, however, denied both benefits. AO held that since Assessee already owned multiple residential properties, the conditions of Section 54F were not satisfied. Further, in the absence of satisfactory proof of acquisition, the indexed cost of ₹1.54 crore was disallowed.
On appeal, CIT(A) ruled in favour of Assessee. Relying on the 2019 Family Settlement Deed, CIT(A) observed that Assessee had relinquished ownership in Kurukshetra & Chandigarh houses in favour of his son & brother, while another house remained in joint ownership with his wife. Hence, he was not the absolute owner of more than one property, making him eligible for Section 54F relief.
