VIJAYALAKSHMI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) At the instance of the assessee, the Income-Tax Appellate Tribunal, Bangalore Bench (hereinafter referred to as the Tribunal), has, under sub- sec(1) of S.256 of the Income-tax Act, 1961 (hereinafter referred to as the Act) referred to this Court the following question of law

(2.) The material facts relevant to the above question, are briefly these: The assessee had purchased a flat in Bombay in the year 1962. she had leased it to her husband on a monthly rent of Rs.700 and was also living with him therein. In the year 1-4-1969 to 31-3-1970 (relevant to the assessment year 1970-71) she sold that flat for Rs.80,000, About the same time, she purchased another flat in Bombay for Rs.63,000. The Income-tax Officer determined the long term capital gains arising out of the sale of the first flat, as amounting to Rs.49,000 and he brought that amount to tax after giving the basic exemption and 45 per cent deduction.

(3.) The claim of the assessee for exemption from Income-tax on the capital gains arising out of the sale of the first flat, was under S.54 of the Act. The material portion of that Section reads :