Law:

Section:

Section 54F of the Income-tax Act, 1961 - Capital gains - Exemption of, in case of investment in residential house - Assessment year 1983-84 - Whether for qualifying for exemption under section 54F, it is necessary and obligatory to have investment made in residential house in name of assessee only and not in name of any other person - Held, yes - Whether investment of sale proceeds of agricultural land by assessee in purchasing plot and constructing residential house thereon in name of his only adopted son would qualify for exemption under section 54F - Held, no FACTS The assessee, who died on 9-5-1991, sold his agricultural land and invested sale proceeds in purchasing a plot and constructing a residential house thereon in the name of his only adopted son (appellant). He filed his return declaring nil income contending that capital gain arising on sale of agricultural land was exempt under section 54F. The Assessing Officer held that the investment made by the assessee in the name of his son did not qualify for exemption under section 54F and, therefore, he was liable to pay capital gain taxes. On appeal, the Commissioner (Appeals) held that section 54F contemplates only investment in residential property by the assessee; it is enough if the sale proceeds are invested in the construction of a residential house. He further held that it is not necessary that newly constructed house should be in the name of the assessee. He, thus, allowed the assessee's appeal. On the revenue's appeal, the Tribunal set aside the order of the Commissioner (Appeals) and restored the order of the Assessing Officer. Therefore, the appellant, who was the only legal heir of the deceased assessee, filed instant appeal. He also filed writ petition challenging the recovery proceedings initiated under section 156, read with section 271(1)(a), and basically denying the tax liability of the deceased assessee. HELD WHETHER APPEAL FILED BY THE APPELLANT BEFORE THE TRIBUNAL ON 1-5-1998 IN THE NAME OF ASSESSEE, WHO DIED ON 9-5-1991, WAS COMPETENTLY FILED. The appeal filed before the Tribunal on 1-5-1988 was competent. It was arising out of the assessment year 1983-84. The department had issued…

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