Zainul Abedin Ghaswala v. NFAC
Finin2min Judgment Intelligence is provided for general informational and educational purposes only. It is not legal, tax, accounting, investment or other professional advice and is not a substitute for advice on the user's specific facts. The Finin2min summary, Q&A, reliance profile, fact-match indicators, comparisons and practical takeaways are editorial analysis and are not part of the Court/Tribunal judgment. Before citing, filing, advising or acting on a case, read the complete official judgment/order, verify the cause title, case number, coram, date, applicable statutory text and jurisdiction, and check subsequent appellate history, review/SLP status and later amendments. A similar fact pattern does not guarantee the same outcome. No advocate-client, CA-client or other professional relationship is created by use of this page.
Case in 2 minutes
Section 54F: ownership/co-ownership of residential houses and treatment of conflicting High Court authority.
Result: Operative order controls. The controlling text is the reasoning and operative order in the packaged judgment, not this editorial summary.
Case snapshot
Sections / provisions: 54F
Questions before the Court / Tribunal
- Section 54F: ownership/co-ownership of residential houses and treatment of conflicting High Court authority.
- What factual, statutory and procedural conditions control the relief?
- How does the operative order apply to the parties and the challenged proceeding?
Material facts and procedural background
Zainul Abedin Ghaswala, CIT(A), NFAC, At 142/148, Ghaswala Estate PratyakshakarBhavan, C- S.V. Road, Jogeshwari (West), Vs. 13, Bandra Kurla Mumbai-400102. Complex, Bandra East, Mumbai-400051. PAN No. AFNPG 7463 D Appellant Respondent
Assessee by : Mr. Sunil M. Makhija– Advocate Revenue by : Mr. A.N. Bhalekar, DR
This appeal by the assessee has been preferred against order dated 10.01.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2016-17, raising following grounds:
1. The Ld. AO has erred in disallowing exemption claimed u/s 54F of the I.T. Act amounting to Rs. 2,60,00,000/- without appreciating the facts of the case as well law.
2. The Ld. CIT (A) has erred in not appreciating the fact that appellant was owner of one residential house only, and was not at all the co-owner of the other flats as has been alleged/ misinterpreted by the Ld. Assessing officer and Hon'ble CIT (A)
Appellant / assessee submissions
5.2 Before us, the Ld. Counsel of the assessee submitted that where there are different views of non-jurisdictional High Court , then one favourable to the assessee has to be followed. The Ld. Counsel of the assessee relied on the decision of the Hon’ble Supreme Court in the case of CIT v. Vegetable Products Ltd. 88 ITR 0192. Further, the Tribunal in the case of ITO v. Upkar Retail Pvt. Ltd. ITAT ‘B’ Bench Ahmedabad ITA No. 2237/Ahd/2014 relying on the decision of the Hon’ble Supreme Court in the case of CIT v. Vegetable Products Ltd. (supra), which was followed by the Tribunal in the case of Tej International Pvt. Ltd. v. DCIT [(2000) 69 TTJ 650 (Del)], held that in case of conflict in the decision of the non-jurisdictional High Court, the view which is favourable to the assessee should be followed. The relevant finding of the Tribunal(supra) is reproduced as under:
Revenue / respondent submissions
The packaged judgment does not separately label the respondent's submissions in an independently extractable passage. No contention is inferred; read the full order.
Court / Tribunal analysis and reasoning
4. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in dispute before us is whether the co-ownership of the assessee in more than one residential properties could make assessee liable for
Thus, High Court held that in terms of provisions of section 54F, where assessee on date of sale of long term capital asset owns a residential house even jointly with another person, his claim for deduction of capital gain arising from sale of asset has to be rejected.”
6. We have considered the rival submissions and perused the records. It is not in dispute that two High Courts, namely, Gauhati High Court and Karnataka High Court, have expressed conflicting views regarding levy of interest under sections 234B and 234C on deemed income under section 115J. Hon'ble Gauhati High Court has opined that when legal fiction is to be created for an obvious purpose, full effect to it should be given. Quoting Lord Asquith who said, "the statute
5.3 In view of the binding precedents referred above, we find that decision of the Hon’ble Madras High Court is in favour of the assessee and not a single decision of the Jurisdictional High Court , which isadverse to the assessee, has been referred by the Ld. DR and therefore decision of the Madras High Court being favourable to the assessee, the claim of deduction u/s 54F of the Act need to allowed, as there is no material to show that assessee is exclusively owner of the other five residential properties/flats which are occupied by the other family members. The grounds of appeal of the assessee are accordingly allowed.
Operative decision and relief
5.3 In view of the binding precedents referred above, we find that decision of the Hon’ble Madras High Court is in favour of the assessee and not a single decision of the Jurisdictional High Court , which isadverse to the assessee, has been referred by the Ld. DR and therefore decision of the Madras High Court being favourable to the assessee, the claim of deduction u/s 54F of the Act need to allowed, as there is no material to show that assessee is exclusively owner of the other five residential properties/flats which are occupied by the other family members. The grounds of appeal of the assessee are accordingly allowed.
6. In the result, the appeal filed by the assessee is allowed.
Ratio and legal principle
- The packaged judgment addresses Section 54F: ownership/co-ownership of residential houses and treatment of conflicting High Court authority. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions.
- Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.
Why this judgment matters
This decision is relevant to practitioners and affected parties dealing with section 54f: ownership/co-ownership of residential houses and treatment of conflicting high court authority. Its value lies in showing how the adjudicating forum connected the applicable rule to the proved facts and procedural posture.
Practitioner action points
- Match the statutory version, jurisdiction, procedural stage and decisive evidence before relying on the result.
- Verify current appellate, review and SLP history and any later amendment or controlling authority.
- Attach the complete judgment to the working paper or filing and cite the paragraph/page supporting the proposition.
Can I rely on this judgment?
| Authority level | ITAT |
|---|---|
| Source integrity | Sanitized readable full judgment copy packaged; official primary replacement pending |
| Repository release | HOLD_SOURCE_OR_LATER_HISTORY |
| Reliance rule | Verify current history and cite the judgment's narrow proposition, not the editorial headnote. |
Does this case match your facts?
Stronger match when
- The same primary issue is raised.
- The same statutory version and jurisdiction apply.
- The procedural stage and burden of proof are comparable.
- The material documentary record is substantially similar.
Weaker / distinguishable when
- A later higher-court ruling changes the position.
- The statutory provision or relevant period differs.
- The evidence or procedural chronology is materially different.
- A defect decisive here was cured in the user's case.
Questions this judgment answers
What was the main dispute in Zainul Abedin Ghaswala v. NFAC?
Section 54F: ownership/co-ownership of residential houses and treatment of conflicting High Court authority.
Which facts matter most?
Zainul Abedin Ghaswala, CIT(A), NFAC, At 142/148, Ghaswala Estate PratyakshakarBhavan, C- S.V. Road, Jogeshwari (West), Vs. 13, Bandra Kurla Mumbai-400102. Complex, Bandra East, Mumbai-400051. PAN No. AFNPG 7463 D Appellant Respondent
What did the ITAT Mumbai decide?
6. In the result, the appeal filed by the assessee is allowed.
What legal principle can be taken from the judgment?
The packaged judgment addresses Section 54F: ownership/co-ownership of residential houses and treatment of conflicting High Court authority. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions. Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.
Which provisions should be checked?
54F
When is the case most useful?
When the user's facts raise the same issue - Section 54F: ownership/co-ownership of residential houses and treatment of conflicting High Court authority - at a comparable procedural stage and under the same statutory version.
What could distinguish the case?
Different evidence, jurisdiction, statutory period, procedural chronology, or later controlling authority can materially change the result.
Can it be cited without another current-law check?
No. Read the packaged judgment and verify current appellate/review/SLP history, statutory amendments and jurisdiction before citation or advice.
Section / provision impact
- 54F - apply the exact version considered in the judgment.
Case network
Similar issue / useful comparison
- JM Financial Ltd. v. Dy. CIT - ITAT Mumbai - F Bench
- Mrs. Usha Eswar v. ITO - Court / Tribunal to be verified
- Adityaraj Builders v. State of Maharashtra - Bombay High Court
Different outcome / possible distinction
- Reetu Devi Nanecha Vs ITO TDS - Quashed / set aside
- CIT-7 Vs. Paville Projects Pvt ltd - Quashed / set aside
Full judgment and source control
Read / download packaged judgment record
Source class: SANITIZED_LOCAL_FULL_JUDGMENT_COPY_PRIMARY_PENDING · Repository status: HOLD_SOURCE_OR_LATER_HISTORY
Finin2min Judgment Intelligence is provided for general informational and educational purposes only. It is not legal, tax, accounting, investment or other professional advice and is not a substitute for advice on the user's specific facts. The Finin2min summary, Q&A, reliance profile, fact-match indicators, comparisons and practical takeaways are editorial analysis and are not part of the Court/Tribunal judgment. Before citing, filing, advising or acting on a case, read the complete official judgment/order, verify the cause title, case number, coram, date, applicable statutory text and jurisdiction, and check subsequent appellate history, review/SLP status and later amendments. A similar fact pattern does not guarantee the same outcome. No advocate-client, CA-client or other professional relationship is created by use of this page.