Dec 27, 2019 / by Winer PR / In Hot Asian Male / Leave a comment

FULL TEXT OF THE ITAT ORDER IS THE FOLLOWING

This will be an appeal filed because of the assessee from the purchase of ld. CIT(A)-III, Jaipur dated 16.12.2015 for Assessment Year 2012-13 wherein the assessee has challenged the action of ld. CIT(A) in confirming the dis allowance of exemption of Rs. 30,00,000/- claimed u/s 54F regarding the Act.

Shortly stated, the reality associated with the situation are that through the 12 months in mind, the assessee has offered three agriculture lands belonging to him for a purchase consideration of Rs. 99,25,000. The assessee has bought another agricultural land at a consideration of Rs. 32,00,000/- for which deduction u/s 54F has been reported and exact same ended up being allowed because of the Assessing Officer and it is maybe maybe not in dispute before us. The assessee in addition has purchased a residential home on 23.05.2011 for the purchase consideration of Rs. 30,00,000/- when you look at the title of his spouse, Smt. Nikita Jain, and stated deduction u/s 54F of this Act and that is in dispute before us.

through the length of evaluation procedures, the assessee had been expected to show cause as to the reasons the reported u/s 54F of this Act, 1961 may possibly not be disallowed, because the home had not been owned when you look at the title of assessee. In reaction, the assessee submitted that the consideration for such home had been given out of payment of advance of the assessee received from Narvik Nirman & Financiars Pvt. Ltd. and it also ended up being further submitted that the brand new residential household need not be purchased because of the assessee inside the very own name neither is it necessary so it ought to be bought solely in their title. It had been submitted that the assessee have not bought the brand new household in the name of a complete stranger and whole investment has arrived out from the supply of the assessee and there clearly was no share from the assessee’s wife. The distribution regarding the assessee had been considered not discovered acceptable into the Assessing Officer. Depending on Assessing Officer, the home that was offered had been from the assessee whereas the reinvestment in property (residential household) was built in the title of Smt. Nikita Jain, wife associated with assessee. It was further held because of the AO that Smt. Nikita Jain, spouse for the assessee, is having her PAN and filing her return of earnings that is additionally evaluated to income tax, consequently, according to income tax conditions, spouse and spouse both could never be regarded as her explanation single entity therefore the good thing about investment created by a person assessee can’t be provided to 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 new asset ought to be into the title of assessee himself. It had been further held by the AO that in lack of the non-public stability sheet associated with assessee and lack of appropriate documentary evidence, it can not be ascertained whether assessee will not possess one or more domestic home, except that brand new asset, from the date of transfer associated with asset that is original. Consequently, of these two reasons, the claim associated with the assessee u/s 54F for the I.T.Act, 1961 had been disallowed.

Being aggrieved, the assessee carried the problem in appeal prior to the ld CIT(A) and presented that the acquisition of an innovative new domestic home has to be bought by the assessee.

Nevertheless, it isn’t especially required beneath the legislation that the home should really be purchased into the name of assessee only. It had been further contended that liberal construction should always be fond of conditions of section 54F for the Act and when substantive requirement are satisfied, advantage provided by the Parliament shouldn’t 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, into the context of section 54F for the Act and get of household within the name of assessee’s spouse, it absolutely was held that the latest house that is residential not be bought by the assessee inside the title nor is it necessary it should always be bought and solely in the name. Further, reliance had been positioned on your choice of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in fact the homely house ended up being purchased into the title associated with the assessee’s spouse, deduction under part 54 ended up being permitted. Further, reliance ended up being put on your decision of Hon’ble Andhra Pradesh tall Court in the event of Late Gulam Ali Khan vs. CIT (165 ITR 228) wherein within the context of area 54 of this Act, it had been held that the phrase ‘assessee’ should be provided an extensive and interpretation that is liberal as to incorporate their legal heirs also. Further, reliance ended up being put on your choice of Honorable Karnataka tall Court within the instance of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it had been held that where in fact the consideration that is entire flown from her spouse, just because in a choice of the sale deed or in the bond, her husband’s name can be mentioned, the assessee may not be rejected the main benefit of deduction u/s 54 and 54EC of this Act. Further, reliance ended up being added to your decision of Honorable Delhi High Court in case 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 wife additionally the property happens to be bought jointly within the names, it could perhaps perhaps not make a difference additionally the conditions stipulated in section stand that is 54F.

The ld. CIT(A) but relied regarding the decision of Honorable Rajasthan tall Court in case of Kalya vs. CIT (251 CTR 174) wherein within the context of section 54B of this Act, it had been held that the assessee wouldn’t be eligible to get exemption for land purchase by him when you look at the title of their son and daughter-in-law. Further into the said choice, it absolutely was held that the word ‘assessee’ utilized in the IT Act should be provided a ‘legal interpretation’ and not a ‘liberal interpretation, it shall curtail the revenue of the Government, which the law does not permit as it would tantamount to giving a free hand to the assessee and his legal heirs and. After the choice of Honorable Rajasthan tall Court in case there is Kalya, the ld. CIT(A) upheld the rejection of claim regarding the assessee u/s 54F of this Act.

The ld during the course of hearing. AR reiterated the submissions created before the ld. CIT(A). Further, ld. AR additionally drawn our mention of the decision that is recent of 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 when you look at the context of section 54B, it had been held that in which the investment is manufactured into the title associated with the spouse, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.

into the said instance, the assessee has sold agricultural land and bought another agricultural land within the title of his spouse and reported deduction u/s 54B regarding the Act. The Bench that is co-ordinate vide purchase in ITA No. 333/JP/2016 dated 26.12.2016 after the decision of Honorable Rajasthan tall Court in the event of Kalya vs. CIT(supra) had determined the problem from the assessee and has now verified the denial of deduction u/s 54B of the Act. The Hon’ble Rajasthan High Court has framed the following substantial question of law in the context of said facts, on appeal by the assessee

“Where ld. ITAT ended up being justified in disallowing the exemption u/s 54B o f the Act without appreciating that the funds utilized for the investment for sale for the home eligible u/s 54B belonged towards the appellant only and simply the authorized document had been performed within the title o f the spouse and additional the wife had not split income source.”

The Honorable Rajasthan High Court, after considering its previous choice in the event of Kalya vs. CIT(supra) while the some other choices of Honorable Delhi High Court, Honorable Madras tall Court, Honorable Karnataka tall Court, Honorable Punjab and Haryana tall Court, and Honorable Andhra Pradesh tall Court, as additionally relied upon by the assessee, has held it is not specified in the legislation that the investment is to be in the name of the assessee and where the investment is made in the name of wife, the assessee shall be eligible for deduction and has thus decided the matter in favour of the assessee that it is the assessee who has to invest and. The relevant findings regarding the Honorable Rajasthan tall Court are included at para 7.2 and 7.3 of its order that are reproduced as under:-

The word used is assessee has to invest, it is not specified that it is to be in the name o f assessee on the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Auto Ltd. and other judgments of different High Courts.