ORDER
B.M. Kothari, A.M.
All these appeals involve consideration of common and identical points. Hence, those appeals were heard together and are being disposed of by this common order.
2. The assessee in all these cases claimed deduction under section 54F, inter alia, on the ground that sale proceeds of the long-term capital assets sold by them have partly been utilized for investment in residential house. The assessing officer denied grant of said deduction under section 54F on the ground that all these assessees were owners of 1/8th share or property No. 8/2286, Parsiwad, Gopipura, Surat, which they were using for their self-residence. Such a view was taken by the assessing officer in view of the plain language of the proviso to sub-section (1) of section 54F. The proviso to section 54F(1) provides that where the assessee owns on the date of the transfer of the original asset any residential house, the income from which is chargeable under the head “Income from house property” other than the new asset acquired from such long-term capital gains will not be entitled to grant of deduction under section 54F. The assessee contended that the sale proceeds of the long-term capital assets transferred by them have been utilised for purchasing 5/18th right from other co-owners in the same residential house property. The investment so made in the residental house property therefore, qualifies for grant of deduction under section 54F. The assessing officer did not accept this contention and refused to grant deduction under section 54F.
3. The learned Commissioner (Appeals) confirmed the action of the assessing officer.
4. Shri M.K. Patel, learned counsel appeared on behalf of all these assessee and brought to our notice a decision of Tribunal, Bombay “E” Bench in the case of Smt. Kalwanti D. Alerja v. ITO (1996) 54 TTJ (Bom) 593 in which it was held that in order to exclude exemption under section 54F, assessee must own an identifiable residential unit and where the assessee purchased 1/5th share in the house property in which she already had 2/5th undivided share, she was eligible for exemption under section 54F. The headnote of the said judgment is reproduced below :
“In the instant case it can be said that the assessee on the date of purchase of 1/5th share from her son in the flat did not have any other identifiable different unit. Consequent upon the purchase also assessee had only one identifiable residential unit. She simply got the bigger share in the said unit by making the purchases. The fact that the assessee had interest in the same unit prior to the date of purchase is not the condition aliunde to which deduction under section 54F can be denied to the assessee. Section 54F was inserted in the statute with an intent to provide incentive to the house building activity. In a welfare state it is necessary to see that citizens get proper shelter. To facilitate the task the section was enacted. It is a benevolent provision, therefore, should not be constructed too technically. Take an example, X constructs a house on a plot owned by him. First year he sells shares and constructs ground floor of the house. Next year again he sells the shares and constructs first floor. Benefits under section 54F cannot be denied just because person in the first year owns ground floor of the house. The meaning of the word owns on the date of transfer of original assets is in relation to an identifiable different unit and not in respect of the same unit. Therefore, conditions precedent for availing of the benefit of section 54F did not exist in the facts and circumstances of the case. The assessing officer is directed to allow the benefit of section 54F to the assessee. CIT v. Aravinda Reddy (1979) 120 ITR 46 (SC) and Shiv Narayan Chaudhari v. CWT (1977) 108 ITR 104 (All) relied on.”
5. The learned Departmental Representative was fair enough to admit that the facts of the present cases are squarely covered in favour of the assessee by the aforesaid decision of the Tribunal. However, the department would like to keep the matter alive.
6. Since the facts of all the present cases are identical with the facts of the case of Smt. Kalwanti D. Alreja v. ITO (supra), we respectfully following the above referred order of the Tribunal, Bombay hold that the assessee will be entitled to grant deduction under section 54F on the facts and circumstances of the case. The assessing officer is directed to grant deduction under section 54F in all the three cases.
7. In the result, all the appeals are allowed.