Chandra Poojari, Accountant Member - This appeal is directed against the order of the CIT(A)-IV, Hyderabad dated 31.01.2012 for assessment year 2008-09.

2. The Revenue raised the following grounds of appeal:

1. The CIT(A) erred on both facts and law.

2. The CIT(A) erred in allowing exemption u/s. 54F to the assessee though the owned more than one residential houses as on the date of transfer.

3. Brief facts of the case are that the assessee is housewife, having income from 'house property'. In her return of income, filed for the A.Y. 2008-09 on 26.3.2009, she had declared an income of Rs. 24,325/ -. However, it was observed that in the computation of total income, the assessee had shown having received Long Term Capital gains of Rs. 1,37,02,475/- on sale of shares. Out of the same, Rs. 1,12,28,000/- were claimed as exempt u/s. 54F (CGS), while Rs. 25,00,000/- u/s. 54EC (REC). Evidence and details in respect of the said investments were filed by the assessee. During the course of assessment proceedings, it was observed that the assessee had shown income from 'House property' in her e-return, in respect of the following properties:

(i) Property at 204, Meenakshi Royal Court, Road No. 11, Banjara Hills, Hyderabad.

(ii) Property at 301, My Home Navadeep, Madhapur, Hyderabad.

4. From the above, the Assessing Officer noted that the assessee owned more than 2 houses. He noted that as per the provisions of sec. 54F, exemption is not available where the assessee owns more than 1 residential house, other than the new asset, on the date of transfer of original asset. It was noted that the date of transfer of shares in the case of the assessee was between April, 2007 to November, 2007. As on the date of transfer of shares, however, the assessee owned more than one house. The Assessing Officer, therefore, required the assessee to explain as to why her claim of exemption u/s. 54F should not be disallowed.

5. In response, the assessee furnished a copy of the Gift Deed dated 2.4.2007 in respect of the property at 204, Meenakshi Royal Court, Road No. 11, Banjara Hills, Hyderabad, stating that the same had been gifted to Sri B. Siddhardh, aged 11 years, a minor represented by Sri B. Jaya Kumar. The Assessing Officer noted that as per the provisions of sec. 27, any person, who transfers, otherwise than for adequate consideration, any house to a minor child, shall be deemed to be the owner of the house property so transferred. He further noted that the Gift Deed was not registered and the gift had been claimed as given to the assessee's son only, who was a minor. Accordingly, the Assessing Officer concluded that such gift deed was furnished only with an intention to show that she had transferred the impugned property to her minor son before the transfer of shares.

6. In view of the above facts, the Assessing Officer required the assessee to explain as to why the claim of exemption should not be disallowed, as the assessee was owning more than one house as on the date of transfer. Vide letter dated 16.12.2010 it was submitted by the assessee that sec. 27 defines a owner of a house in the context of computing income from house property under the head "Income from House Property", within the provisions of sec. 22 to 26. It was averred that the assessee had got the Gift Deed notarized, which duly conveyed the transfer and is therefore a legal transfer.

7. Alternatively, the assessee claimed that the house at "My Home Navadeep" is a joint property, held by the assessee jointly with her husband. The assessee relied on the decision in the case of ITO v. Rasiklal N. Satra [2006] 98 ITD 335 (Mum.), holding that share in a house per se is not a single ownership. Accordingly, it was claimed that the assessee was eligible for exemption u/s. 54. On a consideration of the contentions of the assessee, the Assessing Officer opined that as per sec. 123 of the Transfer of Property Act, unless a gift of property is registered and stamped, and further attested by two wit