FULL TEXT OF THE ITAT PURCHASE IS THE FOLLOWING

Product Information

This really is an appeal filed by the assessee resistant to the purchase of ld. CIT(A)-III, Jaipur dated 16.12.2015 for Assessment 12 months 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.

Fleetingly claimed, the reality associated with instance are that throughout the 12 months into consideration, the assessee has offered three lands that are agriculture to him for the purchase consideration of Rs. 99,25,000. The assessee has purchased another land that is agricultural a consideration of Rs. 32,00,000/- for which deduction u/s 54F has been advertised and exact exact same had been allowed by the Assessing Officer and it is perhaps not in dispute before us. The assessee has additionally bought a property that is residential 23.05.2011 for a purchase consideration of Rs. 30,00,000/- into the title of their spouse, Smt. Nikita Jain, and claimed deduction u/s 54F for the Act and that is in dispute before us.

The assessee was asked to show cause as to why the claimed u/s 54F of the Act, 1961 may not be disallowed, as the property was not owned in the name of assessee during the course of assessment proceedings. As a result, the assessee presented that the consideration for such home ended up being 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 brand new house that is residential not be purchased by the assessee in his very own name neither is it necessary so it ought to be purchased solely in his title. It absolutely was submitted that the assessee has not yet bought the brand new home in the title of the complete stranger and whole investment has arrived from the supply of the assessee and there is no share through the assessee’s spouse. The submission of this 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 for the assessee. It had been further held by the AO that Smt. Nikita Jain, spouse regarding the assessee, is having her PAN and filing her return of income which will be also examined https://sweetbrides.net/russian-brides/ russian brides to taxation, consequently, depending on tax conditions, spouse and spouse both could never be regarded as solitary entity additionally the good thing about investment created by a person assessee can’t be provided to another assessee that is individual. The AO further drawn mention of the the conditions of Section 54F associated with Act and held that to claim deduction, the investment in brand new asset should always be into 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 proper documentary evidence, it is not ascertained whether assessee will not have one or more domestic home, other than brand new asset, regarding the date of transfer of this asset that is original. Properly, of these two reasons, the claim associated with the assessee u/s 54F for the I.T.Act, 1961 ended up being disallowed.

Being aggrieved, the assessee carried the situation in appeal prior to the ld CIT(A) and submitted that the purchase of a brand new domestic home has become purchased because of the assessee.

But, it is really not especially needed underneath the law that your house ought to be bought into the title of assessee only. It was further contended that liberal construction should always be fond of conditions of section 54F for the Act of course substantive requirement are satisfied, advantage provided by the Parliament really should not be recinded for small and unimportant inconsistencies. Further, the assessee put reliance from 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 of the Act and get of home within the name of assessee’s spouse, it absolutely was held that the newest house that is residential not be bought by the assessee in their name neither is it necessary so it must be bought and solely in the name. Further, reliance ended up being positioned on your decision of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in fact the homely household ended up being bought within the title for the assessee’s spouse, deduction under part 54 ended up being allowed. Further, reliance ended up being positioned on 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 regarding the Act, it had been held that the phrase ‘assessee’ should be offered a broad and interpretation that is liberal as to incorporate his appropriate heirs additionally. Further, reliance was put on your decision of Honorable Karnataka tall Court within the full 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, just because either in the purchase deed or perhaps into 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 associated with Act. Further, reliance was put on the 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 where in actuality the assessee has included the title of his spouse therefore the home happens to be bought jointly when you look at the names, it might maybe not make a difference and also the conditions stipulated in section stand that is 54F.

The ld. CIT(A) but relied regarding the choice of Honorable Rajasthan High Court in case of Kalya vs. CIT (251 CTR 174) wherein into the context of section 54B for the Act, it was held that the assessee wouldn’t be eligible to get exemption for land purchase by him within the title of their son and daughter-in-law. Further into the said choice, it had been held that the word ‘assessee’ utilized in the IT Act has to 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 associated with the assessee u/s 54F for the 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 current choice of 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 had been held that in which the investment is manufactured within the title associated with the wife, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.

The assessee has sold agricultural land and purchased another agricultural land in the name of his wife and claimed deduction u/s 54B of the Act in the said case. The Co-ordinate Bench vide its purchase in ITA No. 333/JP/2016 dated 26.12.2016 after the choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT(supra) had determined the problem up against the assessee and contains confirmed the denial of deduction u/s 54B of the Act. When you look at the context of said facts, on appeal by the assessee, the Hon’ble Rajasthan tall Court has framed listed here substantial concern of legislation:

“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 into the appellant just and simply the document that is registered performed into the name o f the spouse and additional the wife had not split revenue stream.”

The Honorable Rajasthan tall Court, after considering its previous choice in the event of Kalya vs. CIT(supra) plus the many other decisions of Honorable Delhi High Court, Honorable Madras tall Court, Honorable Karnataka High Court, Honorable Punjab and Haryana tall Court, and Honorable Andhra Pradesh tall Court, as also relied upon because of the assessee, has held that it’s the assessee who has got to get and it’s also not specified within the legislation that the investment is usually to be within the title associated with the assessee and in which the investment is manufactured within the title of spouse, the assessee will be qualified to receive deduction and it has hence determined the situation in favour of the assessee. The appropriate findings associated with the Honorable Rajasthan High Court are contained at para 7.2 and 7.3 of their purchase that are reproduced as under:-

on a lawn of investment produced by the assessee within the title of their spouse, in view of this choice of Delhi High Court in Sunbeam Auto Ltd. along with other judgments of various High Courts, the term utilized is assessee has got to spend, it’s not specified that it’s to stay the title o f assessee.