Case Law Details
Shri Vivek Jain Vs. DCIT (ITAT Jaipur)
Through the length of evaluation proceedings, the assessee had been expected to demonstrate cause why the reported u/s 54F of this Act, 1961 might not be disallowed, once the home had not been owned into the title of assessee. In reaction, the assessee submitted that the consideration for such home ended up being paid of payment of advance from the assessee received from Narvik Nirman & Financiars Pvt. Ltd. and it also ended up being further submitted that the brand new house that is residential not be bought because of the assessee in their very own title neither is it necessary it must be bought solely inside the title.
It had been submitted that the assessee has not yet bought the brand new household in the title of a complete complete complete stranger and entire investment has arrived from the way to obtain the assessee and there was clearly no share through the assessee’s spouse. The distribution for the assessee ended up being considered yet 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 associated with assessee, is having her PAN and filing her return of earnings which can be additionally evaluated to income tax, consequently, depending on tax conditions, husband and spouse both could never be regarded as solitary entity as well as the advantageous asset of investment produced by a person assessee can’t be provided to another specific assessee.
The AO further drawn mention of the 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 name 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 is not ascertained whether assessee will not obtain one or more domestic household, apart from brand brand brand new asset, in the date of transfer for the initial asset. Appropriately, of these two reasons, the claim regarding the assessee u/s 54F of the I.T.Act, 1961 had been disallowed.
Contention of Appellant
Assessee contends that buy of a fresh house that is residential become bought because of the assessee. Nevertheless, it’s not especially needed underneath the legislation that the home is bought into the title of assessee just. It had been further contended that liberal construction should always be fond of conditions of section 54F for the Act if 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 from the choice of Honorable Delhi tall Court in the event of CIT vs. Kamal Wahal (351 ITR 4), wherein, within the context of section 54F for the Act and get of household when you look at the name of assessee’s spouse, it absolutely was held that the latest house Click Here that is residential not be purchased because of the assessee in the title neither is it necessary it should really be bought and solely in the title.
Further, reliance ended up being added to your decision of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in actuality the homely household ended up being bought within the title regarding the assessee’s spouse, deduction under part 54 had been permitted.
Further, reliance had been put on 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 area 54 of this Act, it had been held that the phrase ‘assessee’ must certanly be offered an extensive and interpretation that is liberal as to incorporate their appropriate heirs additionally.
Further, reliance had been put on your decision of Honorable Karnataka tall Court when you look at the situation of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it had been held that where in actuality the consideration that is entire flown from her spouse, simply because in a choice of the purchase deed or perhaps within 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 added to your decision of Honorable Delhi tall Court in the event of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein within the context of section 54F for the Act, it absolutely was held that in which the assessee has included the title of their spouse and also the home was bought jointly within the names, it might perhaps maybe not make a difference plus the conditions stipulated in section 54F stand fulfilled.
Held by ITAT
Hon’ble Rajasthan tall Court in case there is 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 where in fact the investment is created within the title for 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.