1. This is an appeal by the assessee pertaining to the assessment year 1978-79.
2. The assessee disclosed the fact that she had one-sixth share in the house property No. 11, Panchsheel Marg, New Delhi, which was sold to the President of the United Arab Republic of Egypt through their Embassy in New Delhi. The entire consideration for the house was Rs. 13,44,926 as per sale deed, dated 6-4-1977. The assessee's share in the said sale proceeds was Rs. 2,24,155. She invested out of the said sum of Rs. 2,22,500 in the purchase of house bearing No. 78-D, Malcha Marg, New Delhi, which was purchased vide sale deed registered with the Sub-Registrar, Delhi, on 1-4-1978. The purchase of the new house was jointly with Shamji Memorial Trust for total consideration of Rs. 4,45,000, in which the assessee's share was Rs. 2,65,176.
3. The ITO, during the course of assessment proceedings, found that there was long-term capital gain of Rs. 1,43,089. Consequently, he required the assessee to show cause as to why capital gain may not be added. Before the ITO, inter alia, it was contended that more than 60 per cent of the entire covered area was exclusively used for self-residence and only part of the building was let out. Thus, the assessee contended that the transfer of her house which, in the two years immediately preceding year of transfer was being used by herself mainly for the purpose of her residence and the assessee had within a period of one year before or after that date purchased a house property for the purpose of her own residence. Thus, it was contended that there was no capital gain on the sale of the property.
4. The learned ITO was not satisfied with the said contention.
According to him the building was not mainly used for the purpose of the residence of the assessee. Consequently, he imposed long-term capital gain at Rs. 1,43,089. The learned AAC agreed with the said finding.
5. Before the Tribunal, on behalf of the assessee, it was contended that the finding of the learned AAC is not correct. Inter alia, it was contended that the covered area as well as uncovered area in full use and occupation of the assessee was more than 60 per cent of the entire area and it was used exclusively for her residence. The assessee filed affidavit of herself before the ITO. In the said affidavit it was clearly stated that out of the total covered area of 11,915 sq. ft. the assessee has been in actual occupation of the covered area of 7,322 sq.
ft. It was also stated that the area which was in exclusive use of the assessee was more than 60 per cent. The ITO did not cross-examine the assessee on the said affidavit. The assessee also filed a certificate of the architect, a copy of which is in the paper book. According to the said certificate also more than 60 per cent of house has been in actual use and occupation of the assessee and her family members. The authorities below did not bring on record any evidence to show that more than 60 per cent of the entire house was not exclusively used by the assessee for her residence The ITO on the basis of the past record came to the conclusion that house was not mainly used by the assessee for her self-occupation. Thus, it was contended that the evidence produced by the assessee remained uncontroverted. Reliance was also placed on the ratio of the decisions in the case of CIT v. C.Jayalakshmi  132 1TR 82 (Mad.) and Addl. CIT v. Vidya Prakash Talwar  132 1TR 661 (Delhi).
6. The learned departmental representative supports the order of the Commissioner (Appeals). According to him on behalf of the assessee no convincing material was produced to show that house was mainly used for her self-residence. It was also contended that a portion of the house was let out to tenant. Under the circumstances, it is not correct to say that the house was mainly used for the residence of the assessee.
Reliance was also placed on the ratio of the decision in the case of Smt. Shantaben P. Gandhi v. CIT  129 ITR 218 (Guj.).
7. We have considered the rival submissions and perused the entire material on record. Before discussing the contentions of the parties and the decisions relied on by them it would be necessary to consider the facts of the case. Stand of the assessee has been that the building was mainly used by her for her self-residence. According to the assessee the total covered area of the house was 12,465 sq. ft.
consisting of the following:Ground floor 4,255First floor 3,944Barsati 713Annexe 3,553 Out of the above, covered area of 4,657 sq. ft. in respect of the first floor and barsati floor was let out. The remaining covered area of 7,808 sq. ft. representing ground floor, annexe and lawns which were about 62.6 per cent of the entire area was used for the assessee's self-residence. In respect of this contention the assessee filed detailed objection supported with the certificate of the architect. A copy of the same is in the paper book. Affidavit of the assessee was also filed which is on page 18 of the paper book. In the said affidavit all the details of the house in question were given. In the said affidavit it was clearly stated that the accommodation to the extent of 7,322 sq. ft. was being used by her for self-residence. The ITO never cross-examined the deponent on the said affidavit. He also did not collect any other material to show that the evidence produced by the assessee was not correct. The ITO rejected the affidavit of the assessee on the ground that it was a self-surviving statement. The ITO was not justified in rejecting the affidavit and other material in such a manner. The affidavit filed by the assessee is also supported by the report of the architect. In the decision in Mehta Parikh & Co. v. CIT  30 ITR 181, the Supreme Court ruled that if the persons who gave affidavits were not cross-examined, it was not open to the revenue to challenge the correctness of the statement made in the affidavit. It is not the case of the revenue that the affidavit filed by the assessee is vague or the like. Looking to the aforesaid facts and the evidence on record it is established that more than 60 per cent of the entire house has been in the self-occupation of the assessee.
8. We may point out that the ITO on the basis of past records was of the view that the assessee was not occupying building mainly for her residence purposes. In the present case here the assessee produced sufficient evidence, as discussed above. It was the duty of the ITO to examine the issue in the light of the evidence produced by the assessee. Thus, the ITO has gone wrong in deciding the issue on the basis of the past records of the assessee.
9. In view of the aforesaid discussion it is proved that out of whole accommodation an area to the extent of 7,322 sq. ft. has been in exclusive use and occupation of the assessee for her residence purposes. Less than 50 per cent of the accommodation was let out to tenant.
10. On the facts, discussed above, it is to be seen whether the house was mainly used by the assessee for her self-residence. The word 'mainly' occurs in Section 54, viz., "which in the two years immediately preceding the date on which the transfer toole place, was being used by the assessee or a parent of his mainly for the purposes of his own or the parent's own residence". In the present case, the only dispute is whether the residence before transfer was mainly used by the assessee for her own residence or not. The word 'mainly' is a simple English word not capable of giving rise to any difficulty in understanding it in the context in which it occurs. According to the Shorter Oxford English Dictionary, the meaning of the word 'mainly' is for the most part chiefly, principally. According to the Universal English Dictionary edited by Henry Cecil Wyld, the meaning of the word 'mainly' is chiefly, to the greatest extent, in the main, for the most part. Consequently, it is clear that the property sold should have been put to use principally as residence for the two years immediately preceding the date of the transfer. In the case of C. Jayalakshmi (supra), the Hon'ble Madras High Court ruled that benefit of Section 54 is not lost merely because the owner happened to let out a small portion in the building for rent.
11. The decision relied on by the revenue in the case of Smt. Shantaben P. Gandhi (supra), is on different facts. In that case the assessee's property was divided into two parts, one of which was larger than the other. The building was constructed on the larger portion which was partly occupied by the assessee. The assessee constructed house on the smaller plot and the construction was completed in March 1968. The larger plot with the superstructure thereon was sold and the conveyance was executed in March 1970. The assessee claimed exemption from capital gains arising on the sale under Section 54 on the ground that the house on the smaller plot had been constructed for purposes of her residence.
The Tribunal held that the assessee was not entitled to exemption. The Hon'ble High Court agreed with the said finding. That decision was given on the facts of that case. So this decision is of no help to the department.
12. Looking to the aforesaid facts and the entire evidence on record we are of the view that the assessee's house in question was mainly used by the assessee for her self-residence for two years immediately preceding the date of transfer. So in view of Section 54 there is no capital gain on the sale of the property. The finding of the Commissioner (Appeals), to the contrary, is not correct. The addition in question is uncalled for and the same is deleted.
13. In view of the aforesaid decision other grounds of appeal become infructuous.