Per M.K.Chaturvedi (Vice-President) : This appeal came before me as a Third Member to express my opinion on the following question:-
“Whether, in view of facts and circumstances, exemption under section 54F of Income Tax Act, 1961 could be allowed to assessee or not?”
2. I have heard the rival submissions in the light of material placed before me and the precedents relied upon. The assessee got share in the house property, as per the WILL of his father He became the joint owner of the property along with his brother. After becoming the joint owner of the said property the assessee sold shares for the purpose of construction of an additional floor in the house for him and the cost to the construction was claimed as exempted under sec 54F.
3 Section 54F exempts tax on long term capital gains arising from transfer of any long term capital asset (not being a residential house) invested in a residential house This exemption cannot be availed if there is a house in existence on the date of transfer In the facts of the present case. I find that the assessee was the joint owner of the house property along with his brother on the date of transfer and he utilized the long term capital gam for construction of additional floor in the same house. The Hon’ble Jurisdictional High Court in the case of CIT v V. Pradeep Kumar And Another, 290 ITR 90 (Mad.) has held that a mere extension of the existing building will not give benefit to the assessee under sec.54F of the Act. The case of the assessee clearly comes within the ken of the ratio of the aforesaid decision. The decision in the case of CIT v P.V Narasimhan, 181 ITR 101 (Mad), as relied by the Id counsel was considered in the case of Pradeep Kumar (supra). In view of the decision of the Jurisdictional High Court which is of binding nature, I agree with the view taken by the learned Judicial Member. 4. The matter will now go before the regular Bench for deciding the appeal in accordance with the opinion of the majority.