FULL TEXT OF THE ITAT PURCHASE IS THE FOLLOWING
This might be an appeal filed by the assessee from 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.
Quickly reported, the important points associated with situation are that through the 12 months into consideration, the assessee has offered three agriculture lands belonging to him for a purchase consideration of Rs. 99,25,000. The assessee has bought another land that is agricultural a consideration of Rs. 32,00,000/- for which deduction u/s 54F has been advertised and exact same had been permitted by the Assessing Officer and it is maybe not in dispute before us. The assessee in addition has bought a domestic home on 23.05.2011 for a purchase consideration of Rs. 30,00,000/- into the title of their spouse, Smt. Nikita Jain, and stated deduction u/s 54F of this Act and that is in dispute before us.
through the span of evaluation proceedings, the assessee had been expected showing cause as to the reasons the reported u/s 54F of this Act, 1961 is almost certainly not disallowed, given that property had not been owned within the name of assessee. Responding, the assessee submitted that the consideration for such home had been settled of payment of advance of the assessee received from Narvik Nirman & Financiars Pvt. Ltd. plus it ended up being further submitted that the latest house that is residential not be bought by the assessee inside the very own title neither is it necessary that it ought to be bought solely in the name. It had been submitted that the assessee have not bought the brand new household in the title of the complete complete stranger and entire 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 had been considered yet not discovered acceptable to the Assessing Officer. According to Assessing Officer, the home that has been offered was from the assessee whereas the reinvestment in home (domestic home) happens to be produced in the name of Smt. Nikita Jain, wife of this assessee. It had been further held by the AO that Smt. Nikita Jain, spouse associated with the assessee, is having her PAN and filing her return of earnings that is additionally evaluated to income tax, therefore, depending on tax conditions, spouse and wife both could never be thought to be single entity together with good thing about investment created by a person assessee may not be provided to another assessee that is individual. The AO further drawn mention of the conditions of Section 54F associated with Act and held that to claim deduction, the investment in brand new asset ought to be within the title of assessee himself. It had been further held by the AO that in lack 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 have more than one domestic household, except that new asset, from the date of transfer associated with initial asset. Appropriately, of these two reasons, the claim regarding the assessee u/s 54F for the I.T.Act, 1961 ended up being disallowed.
Being aggrieved, the assessee carried the problem in appeal prior to the ld CIT(A) and presented that the acquisition of a brand new house that is residential become bought by the assessee.
However, it is really not particularly needed underneath the legislation that your house should really be purchased within the title of assessee only. It had been further contended that liberal construction should always be directed at conditions of section 54F for the Act of course substantive requirement are satisfied, advantage issued by the Parliament really should not be recinded for small and inconsistencies that are irrelevant. Further, the assessee put reliance regarding 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 buy of home within the name of assessee’s spouse, it absolutely was held that the newest house that is residential not be bought because of the assessee inside the title neither is it necessary so it must be company website bought and solely in the title. Further, reliance ended up being put on the decision of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in fact the household had been bought within the title of this assessee’s wife, deduction under part 54 ended up being allowed. Further, reliance ended up being put on your choice 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 regarding the Act, it had been held that your message ‘assessee’ must certanly be offered an extensive and liberal interpretation therefore as to incorporate their appropriate heirs also. Further, reliance ended up being added to your decision of Honorable Karnataka High 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 husband, just because either in the sale deed or perhaps into the bond, her husband’s title can be mentioned, the assessee is not rejected the advantage of deduction u/s 54 and 54EC associated with Act. Further, reliance had been positioned on your choice 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 absolutely was held that where in actuality the assessee has included the title of his spouse and also the property happens to be bought jointly when you look at the names, it could maybe maybe not make a difference and also the conditions stipulated in section 54F stand fulfilled.
The ld. CIT(A) but relied from the choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT (251 CTR 174) wherein within the context of section 54B associated with Act, it absolutely was held that the assessee would not 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 should be given a ‘legal interpretation’ and not just 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. Following a choice of Honorable Rajasthan tall Court in the event of Kalya, the ld. CIT(A) upheld the rejection of claim of this assessee u/s 54F of this Act.
through the length of hearing, the ld. AR reiterated the submissions created before the ld. CIT(A). Further, ld. AR additionally drawn our mention of the present decision of Hon’ble Rajasthan tall Court in the event of Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others dated 07.11.2017) wherein into the context of section 54B, it had been held that where in actuality the investment is created within the name associated with the spouse, 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 Bench that is co-ordinate vide purchase in ITA No. 333/JP/2016 dated 26.12.2016 after the choice of Honorable Rajasthan High Court in case of Kalya vs. CIT(supra) had decided the problem from the assessee and contains verified the denial of deduction u/s 54B of the Act. Into the context of said facts, on appeal because of the assessee, the Hon’ble Rajasthan tall Court has framed the next significant concern of legislation:
“Where ld. ITAT had been justified in disallowing the exemption u/s 54B o f the Act without appreciating that the funds utilized when it comes to investment to buy of this home eligible u/s 54B belonged towards the appellant just and just the document that is registered performed within the title o f the wife and additional the spouse hadn’t separate revenue stream.”
The Honorable Rajasthan tall Court, after considering its previous choice in the event of Kalya vs. CIT(supra) additionally 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 appropriate findings associated with the Honorable Rajasthan High Court are included at para 7.2 and 7.3 of the order that are reproduced as under:-
on a lawn of investment created by the assessee into the title of their spouse, in view regarding the choice of Delhi tall Court in Sunbeam car Ltd. as well as other judgments of various High Courts, the term utilized is assessee has got to invest, it isn’t specified it is to stay the name o f assessee.