Exemption u/s 54F cannot be denied merely for Property Purchase in spouse title

Exemption u/s 54F cannot be denied merely for Property Purchase in spouse title

Exemption u/s 54F cannot be denied merely for Property Purchase in spouse title

Case Law Details

Shri Vivek Jain Vs. DCIT (ITAT Jaipur)

Through the length of evaluation proceedings, the assessee was asked to demonstrate cause as to the reasons the claimed u/s 54F of this Act, 1961 might not be disallowed, while the property had not been owned into the title of assessee. Responding, the assessee presented that the consideration for such home ended up being given out of payment of advance from the assessee received from Narvik Nirman & Financiars Pvt. Ltd. plus it ended up being further submitted that the newest house that is residential not be bought because of the assessee inside the very very own title neither is it necessary so it must certanly be bought solely in the title.

It had been submitted that the assessee have not bought the house that is new the title of the complete complete stranger and whole investment has arrived from the way to obtain the assessee and there clearly was no contribution through the assessee’s spouse. The distribution regarding the assessee ended up being considered not discovered acceptable towards 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 associated with assessee.

It was further held because of the AO that Smt. Nikita Jain, spouse of this assessee, is having her PAN and filing her return of income which will be additionally evaluated to tax, consequently, according to tax conditions, spouse and spouse both could never be thought to be solitary entity additionally the advantageous asset of investment created by a person assessee may not be provided to another specific assessee.

The AO reference that is further drawn the conditions of Section 54F of this Act and held that to claim deduction, the investment in brand brand new asset should really be within the title of assessee himself. It had been further held by the AO that in lack of the non-public stability sheet for the assessee and lack of appropriate documentary evidence, it may not be ascertained whether assessee will not have more than one domestic home, apart from new asset, regarding the date of transfer for the asset that is original. Appropriately, for those two reasons, the claim associated with the 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 by the assessee. But, it isn’t especially needed beneath the statutory legislation that the home must be bought when you look at the title of assessee just. It was further contended that liberal construction should really be fond of conditions of section 54F for the Act if substantive requirement are satisfied, advantage provided by the Parliament really should not be recinded for tiny and unimportant inconsistencies.

Further, the assessee put reliance regarding the choice of Honorable Delhi tall Court in case of CIT vs. Kamal Wahal (351 ITR 4), wherein, into the context of section 54F for the Act and get of household into the name of assessee’s spouse, it absolutely was held that the latest house that is residential not be purchased because of the assessee in the title neither is it necessary so it must be bought and solely inside the title.

Further, reliance had been added to your decision of Honorable Madras High Court in the event of CIT vs. V www.sweetbrides.net/russian-brides. Natarajan (287 ITR 271) where in actuality the homely household had been bought when you look at the title associated with the assessee’s spouse, deduction under part 54 had been permitted.

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 area 54 of this Act, it had been held that the term ‘assessee’ must certanly be offered a broad and liberal interpretation therefore as to incorporate their appropriate heirs also.

Further, reliance was added to your choice of Honorable Karnataka tall Court when you look at the instance of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it had been held that where in fact the whole consideration has flown from her spouse, simply because in a choice of the purchase deed or perhaps into the bond, her husband’s name can be mentioned, the assessee can not be denied the advantage of deduction u/s 54 and 54EC for the Act.

Further, reliance ended up being 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 absolutely was held that where in actuality the assessee has included the title of their wife while the home happens to be bought jointly when you look at the names, it could perhaps perhaps not make a difference as well as the conditions stipulated in section stand that is 54F.

Held by ITAT

Hon’ble Rajasthan tall Court in case there is Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others dated 07.11.2017) wherein into the context of section 54B, it absolutely was held that where in actuality the investment is manufactured when you look at the title associated with the spouse, the assessee will probably 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.

Call Now Button