Case Law Details
Shri N. Ramaswamy Vs ITO (ITAT Chennai)
A bare reading of Section 2(47)(vi) of the Act shows that the agreement or arrangement which has the effect of transferring or enabling the enjoyment of immovable property, has to be considered as transfer in relation to capital asset. In this case, there was a perpetual lease agreement for unlimited period. The assessee was in possession of residential house. Therefore, this Tribunal is of the considered opinion that in view of the definition found in Section 2(47)(vi) of the Act, the transaction of perpetual lease agreement by which the assessee took possession of property for unlimited period, has to be construed as purchase of property within the meaning of Section 54F of the Act.
Furthermore, Section 269UA(2)(iii)(f) of the Act clearly says that any lease for a term of not less than twelve years and includes holding possession of such property thereby taken, has to be construed as transfer. Of course, this is in the context of purchase of property by Central Government in the case of transfer. In other words, Section 269UA(2)(iii)(f) also defines transfer which includes lease for a term not less than twelve years. In this case, admittedly, the lease was not for less than twelve years. Hence, for all practical purposes, the acquisition of property by perpetual lease exceeding the period of twelve years, has to be construed as purchase within the meaning of Section 54F of the Act. In view of the scheme under the provisions of the Income-tax Act, as enunciated under Section 2(47)(vi) and Section 269UA(2)(iii)(f), this Tribunal is of the considered opinion that when the assessee acquired the residential house by means of perpetual lease exceeding twelve years, it has to be construed as acquisition of property/purchase of property within the meaning of Section 54F of the Act. Therefore, the assessee is entitled for exemption under Section 54F of the Act.
FULL TEXT OF THE ITAT JUDGMENT
This appeal of the assessee is directed against the order of the Principal Commissioner of Income Tax -1, Chennai, dated 12.02.2019 for the assessment year 2014-15, passed under Section 263 of the Income-tax Act, 1961 (in short “the Act”).
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