2019年12月25日

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 span of evaluation procedures, the assessee was expected showing cause as to the reasons the reported u/s 54F of this Act, 1961 may possibly not be disallowed, while the home wasn’t owned into the title of assessee. In reaction, the assessee presented that the consideration for such home had been given out of payment of advance of the assessee received from Narvik Nirman & Financiars Pvt. Ltd. also it ended up being further submitted that the newest house that is residential not be bought by the assessee in the very own name neither is it necessary so it must certanly be bought solely in the title.

It had been submitted that the assessee hasn’t bought the house that is new the title of a complete stranger and whole investment has arrived out from the way to obtain the assessee and there clearly was no share through the assessee’s spouse. The distribution regarding the assessee ended up being considered although 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 had been further held by the AO that Smt. Nikita Jain, spouse for the assessee, is having her PAN and filing her return of earnings which will be additionally evaluated to income tax, consequently, according to tax conditions, husband and spouse both could never be thought to be solitary entity while the advantageous asset of investment created by a person assessee is not fond of another assessee that is individual.

The AO reference that is further drawn the conditions of Section 54F associated with the Act and held that to claim deduction, the investment in brand new asset must certanly be into the title of assessee himself. It had been further held because of the AO that in absence of the non-public balance sheet associated with the assessee and lack of appropriate documentary evidence, it may not be ascertained whether assessee will not obtain one or more domestic household, except that brand new asset, regarding the date of transfer associated with initial asset. Properly, of these two reasons, the claim for the assessee u/s 54F for the I.T.Act, 1961 had been disallowed.

Contention of Appellant

Assessee contends that buy of a fresh domestic home has become bought by the assessee. Nonetheless, it’s not particularly needed beneath the statutory law that your house is bought when you look at the title of assessee just. It had been further contended that liberal construction ought to be fond of conditions of section 54F for the Act and in case substantive requirement are satisfied, advantage granted by the Parliament shouldn’t be removed for tiny and inconsistencies that are irrelevant.

Further, the assessee put reliance in the choice of Honorable Delhi High 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 household within the name of assessee’s spouse, it absolutely was held that the newest residential household need not be bought by the assessee in the title neither is it necessary it must certanly be purchased and solely in the name.

Further, reliance ended up being added to your choice of Honorable Madras High Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in fact the homely home had been bought when you look at the name regarding the assessee’s spouse, deduction under area https://www.sweetbrides.net/russian-brides/ 54 had been permitted.

Further, reliance had been added to your choice of Hon’ble Andhra Pradesh tall Court in case of belated Gulam Ali Khan vs. CIT (165 ITR 228) wherein within the context of area 54 regarding the Act, it absolutely was held that the phrase ‘assessee’ should be offered an extensive and liberal interpretation therefore as to add their appropriate heirs additionally.

Further, reliance ended up being positioned on your decision of Honorable Karnataka tall Court into 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 name can also be mentioned, the assessee may not be rejected the advantage of deduction u/s 54 and 54EC regarding the Act.

Further, reliance had been put on your decision of Honorable Delhi tall Court in the event of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein when you look at 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 was bought jointly when you look at the names, it might maybe 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 the event of 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 when you look at the title of this 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.