Exemption u/s 54F cannot be denied merely for Property buy in spouse title
Case Law Details
Shri Vivek Jain Vs. DCIT (ITAT Jaipur)
Through the length of evaluation procedures, the assessee had been expected to demonstrate cause as to the reasons the reported u/s 54F of this Act, 1961 is almost certainly not disallowed, due to the fact home had not been owned within the title of assessee. Responding, the assessee sexybrides.org/asian-brides review presented that the consideration for such home had been given out of payment of advance from the assessee received from Narvik Nirman & Financiars Pvt. Ltd. also it had been further submitted that this new house that is residential not be bought because of the assessee in the very very own title neither is it necessary so it ought to be bought solely inside the title.
It had been submitted that the assessee has not yet bought the house that is new the title of a complete complete stranger and whole investment has arrived out from the way to obtain the assessee and there was clearly no share through the assessee’s wife. The distribution of this assessee ended up being considered yet not found acceptable into the Assessing Officer. The property which was sold was belonging to the assessee whereas the reinvestment in property (residential house) has been made in the name of Smt as per Assessing Officer. Nikita Jain, spouse regarding the assessee.
It had been further held because of the AO that Smt. Nikita Jain, spouse of this assessee, is having her PAN and filing her return of earnings that will be additionally evaluated to income tax, consequently, according to tax conditions, husband and spouse both could never be regarded as solitary entity therefore the advantageous asset of investment created by an individual assessee can not be directed at another assessee that is individual.
The AO reference that is further drawn the conditions of Section 54F for the Act and held that to claim deduction, the investment in brand new asset should always be when you look at the name of assessee himself. It had been further held by the AO that in lack of the private stability sheet of this assessee and lack of proper documentary evidence, it can’t be ascertained whether assessee will not have one or more domestic home, aside from brand brand new asset, regarding the date of transfer regarding the initial asset. Appropriately, of these two reasons, the claim of this assessee u/s 54F for the I.T.Act, 1961 had been disallowed.
Contention of Appellant
Assessee contends that buy of a fresh house that is residential become bought because of the assessee. Nevertheless, it is really not specifically needed beneath the statutory legislation that the home ought to be bought when you look at the title of assessee just. It had been further contended that liberal construction must certanly be directed at conditions of section 54F for the Act and in case substantive requirement are satisfied, advantage issued by the Parliament really should not be recinded for tiny and unimportant inconsistencies.
Further, the assessee put reliance in the choice of Honorable Delhi tall Court in the event of CIT vs. Kamal Wahal (351 ITR 4), wherein, within the context of section 54F for the Act and buy of home when you look at the name of assessee’s spouse, it had been held that the latest house that is residential not be bought because of the assessee in the title neither is it necessary so it must certanly be bought and solely in the title.
Further, reliance was put on your decision of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in actuality the home ended up being bought into the title of this assessee’s spouse, deduction under section 54 had been allowed.
Further, reliance ended up being added to your choice of Hon’ble Andhra Pradesh tall Court in the event of belated Gulam Ali Khan vs. CIT (165 ITR 228) wherein within the context of part 54 regarding the Act, it had been held that the phrase ‘assessee’ must certanly be provided an extensive and interpretation that is liberal as to incorporate their appropriate heirs additionally.
Further, reliance ended up being added to your choice of Honorable Karnataka tall Court within the situation of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it absolutely was held that in which the whole consideration has flown from her spouse, simply because in a choice of the purchase deed or perhaps within the bond, her husband’s title can also be mentioned, the assessee can not be rejected the advantage of deduction u/s 54 and 54EC regarding the Act.
Further, reliance had been added to your decision of Honorable Delhi tall Court in the event of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein into the context of section 54F for the Act, it had been held that in which the assessee has included the title of their spouse as well as the home happens to be purchased jointly in the names, it can perhaps perhaps not make a difference plus the conditions stipulated in section stand that is 54F.
Held by ITAT
Hon’ble Rajasthan High Court in case there is Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others 07.11.2017 that is dated wherein into the context of section 54B, it absolutely was held that where in fact the investment is manufactured into the title regarding the spouse, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.
The same cannot be basis for the denial of deduction claimed u/s 54F of the Act in light of legal proposition so laid down by the Honorable Rajasthan High Court in case of Mahadev Balai (supra), where the investment in the new house property has flown from the assessee, which is not in dispute in the instant case, merely for the reason that the new residential house property has been purchased by the assessee in the name of his wife.