This is certainly 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 of this Act.
Fleetingly reported, the important points associated with situation are that throughout the 12 months into consideration, the assessee has offered three agriculture lands belonging to him for a sale 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 advertised and exact same had been permitted because of the Assessing Officer and it is https://sweetbrides.net/russian-brides/ russian brides not in dispute before us. The assessee in addition has bought a property that is residential 23.05.2011 for a purchase consideration of Rs. 30,00,000/- when you look at the title of their wife, Smt. Nikita Jain, and stated deduction u/s 54F of this Act and which will be in dispute before us.
through 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 might not be disallowed, since the home had not been owned when you look at the name of assessee. In reaction, the assessee presented that the consideration for such home had been given out of repayment of advance of the assessee received from Narvik Nirman & Financiars Pvt. Ltd. also it had been further submitted that the newest house that is residential not be purchased because of the assessee inside the very own title neither is it necessary so it should always be bought exclusively in the name. It had been submitted that the assessee have not bought the brand new house in the title of a complete stranger and whole investment has come out from the supply of the assessee and there was clearly no share through the assessee’s spouse. The submission for the assessee ended up being considered yet not discovered acceptable into the Assessing Officer. According to Assessing Officer, the home that has been offered had been from the assessee whereas the reinvestment in home (domestic household) happens to be built in the name of Smt. Nikita Jain, wife regarding 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 which can be additionally evaluated to tax, consequently, depending on tax conditions, spouse and wife both could not be regarded as solitary entity plus the advantageous asset of investment created by a person assessee may not be given to another individual assessee. The AO reference that is further drawn the conditions of Section 54F of this Act and held that to claim deduction, the investment in brand new asset must be when you look at the title of assessee himself. It was further held because of the AO that in lack of the private stability sheet regarding the assessee and lack of appropriate documentary evidence, it may not be ascertained whether assessee will not have one or more domestic house, except that brand brand new asset, from the date of transfer for the asset that is original. Appropriately, 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 problem in appeal prior to the ld CIT(A) and presented that the acquisition of a fresh residential household has become bought because of the assessee.
Nonetheless, it is really not especially needed beneath the legislation that your house must be bought when you look at the name of assessee just. It had been further contended that liberal construction must be directed at conditions of section 54F for the Act and when substantive requirement are fulfilled, advantage issued by the Parliament really should not be recinded for tiny and inconsistencies that are irrelevant. Further, the assessee put reliance in the decision of Honorable Delhi tall Court in case of CIT vs. Kamal Wahal (351 ITR 4), wherein, within the context of section 54F for the Act and buy of household within the name of assessee’s spouse, it had been held that the newest house that is residential not be bought because of the assessee in their name neither is it necessary so it should really be bought and solely in the name. 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 fact the home ended up being bought into the title of this assessee’s spouse, deduction under area 54 ended up being allowed. Further, reliance ended up being positioned on your choice of Hon’ble Andhra Pradesh tall Court in case of Late Gulam Ali Khan vs. CIT (165 ITR 228) wherein into the context of section 54 associated with Act, it absolutely was held that the word ‘assessee’ must certanly be provided a broad and liberal interpretation so as to include their legal heirs additionally. Further, reliance ended up being positioned on your decision of Honorable Karnataka High Court when you look at the full case of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it absolutely was held that in which the whole consideration has flown from her spouse, just because in a choice of the purchase deed or in the bond, her husband’s title can also be mentioned, the assessee is not rejected the main benefit of deduction u/s 54 and 54EC associated with the 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 into the context of section 54F for the Act, it absolutely was held that in which the assessee has included the name of his wife in addition to home was bought jointly into the names, it might maybe perhaps not make any difference as well as the conditions stipulated in section stand that is 54F.
The ld. CIT(A) however relied regarding the choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT (251 CTR 174) wherein within the context of section 54B of this Act, it absolutely was held that the assessee wouldn’t be entitled to get exemption for land purchase by him into the true title of his son and daughter-in-law. Further within the said choice, it was held that the word ‘assessee’ utilized in the IT Act has to be provided a ‘legal interpretation’ and not really a ‘liberal interpretation, because it would tantamount to providing a free of charge hand into the assessee and their appropriate heirs and it also shall curtail the income regarding the national, that your law doesn’t allow. After the decision of Honorable Rajasthan High Court in case there is Kalya, the ld. CIT(A) upheld the rejection of claim of this 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 also drawn our mention of the the present choice of Hon’ble Rajasthan tall Court in case there is 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 made when you look at the title associated with the spouse, the assessee will probably be eligible for claim of deduction u/s 54B of the Act.
within the said case, the assessee has sold agricultural land and bought another agricultural land within the title of their spouse and reported deduction u/s 54B regarding the Act. The Co-ordinate Bench vide its purchase in ITA No. 333/JP/2016 dated 26.12.2016 after the choice of Honorable Rajasthan High Court in the event of Kalya vs. CIT(supra) had decided the matter up against the assessee and has now verified the denial of deduction u/s 54B of the Act. Within the context of said facts, on appeal by the assessee, the Hon’ble Rajasthan High Court has framed listed here significant 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 used when it comes to investment to buy for the home eligible u/s 54B belonged to your appellant only and simply the document that is registered performed when you look at the title o f the wife and additional the spouse hadn’t split income source.”
The Honorable Rajasthan tall Court, after considering its earlier in the day decision in the event of Kalya vs. CIT(supra) as well as the some other choices of Honorable Delhi tall 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 regarding the Honorable Rajasthan High Court are contained at para 7.2 and 7.3 of the order that are reproduced as under:-
on the floor of investment produced by the assessee within the title of their wife, in view of this choice of Delhi tall Court in Sunbeam Auto Ltd. along with 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.