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

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

Case Law Details

Shri Vivek Jain Vs. DCIT (ITAT Jaipur)

Throughout the length of evaluation procedures, the assessee had been expected showing cause as to the reasons the reported u/s 54F of this Act, 1961 may possibly not be disallowed, since the home had not been owned into the title of assessee. In reaction, the assessee presented that the consideration for such home had been given out of repayment 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 by the assessee inside the very very own title neither is it necessary it must certanly be bought solely in their title.

It absolutely was submitted that the assessee has not yet bought the new home in the title of the complete complete stranger and whole investment has arrived from the way to obtain the assessee and there is no contribution through the assessee’s spouse. The distribution for 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 the assessee.

It had been further held because of the AO that Smt. Nikita Jain, spouse regarding the assessee, is having her PAN and filing her return of earnings that is additionally evaluated to income tax, therefore, according to tax conditions, spouse and spouse both could not be regarded as solitary entity plus the advantage of investment created by an individual assessee can not be directed at another specific assessee.

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 brand new asset should really be into the title of assessee himself. It had been further held by the AO that in lack of the private stability sheet for the assessee and lack of appropriate documentary evidence, it can’t be ascertained whether assessee will not have one or more domestic home, aside from brand new asset, regarding the date of transfer associated with the asset that is original. Appropriately, for those 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 brand new domestic home has to be bought because of the assessee. Nevertheless, it’s not especially needed underneath the legislation that your house should really be bought when you look at the title of assessee just. It had been further contended that liberal construction should really 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 inconsistencies that are irrelevant.

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, into the context of section 54F for the Act and get of home when you look at the name of assessee’s spouse, it had been held that the newest residential household need not be bought by the assessee in the title neither is it necessary so it must certanly be bought and solely in their title.

Further, reliance had been positioned on your choice of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) in which the home had been purchased into the title for the assessee’s wife, deduction under part 54 ended up being permitted.

Further, reliance was added to your decision of Hon’ble Andhra Pradesh tall Court in the event of belated Gulam Ali Khan vs. CIT (165 ITR 228) wherein into the context of part 54 associated with Act, it had been held that your message ‘assessee’ should be provided an extensive and interpretation that is liberal as to add their appropriate heirs additionally.

Further, reliance had been positioned on your decision 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 consideration that is entire flown from her spouse, simply because in a choice of the purchase deed or perhaps into the bond, her husband’s title can also be mentioned, the assessee can’t be rejected the main benefit of deduction u/s 54 and 54EC of this Act.

Further, reliance ended up being put on your choice 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 where in actuality the assessee has included the name of their wife sexybrides.org/asian-brides safe plus the home was bought jointly when you look at the names, it might maybe maybe maybe not make a difference as well as the conditions stipulated in section stand that is 54F.

Held by ITAT

Hon’ble Rajasthan High Court in the event of Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others dated 07.11.2017) wherein within the context of section 54B, it absolutely was held that where in actuality the investment is created into the title for the spouse, the assessee will probably be qualified to receive claim of deduction u/s 54B of the Act.

In light of legal idea so laid straight down because of the Honorable Rajasthan tall Court in case there is Mahadev Balai (supra), where in fact the investment within the brand new home home has flown through the assessee, that will be perhaps not in dispute within the instant instance, just given that the newest domestic home home was bought because of the assessee within the title of their spouse, exactly the same can’t be basis when it comes to denial of deduction stated u/s 54F regarding the Act.

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