This is certainly an appeal filed because of the assessee up against the purchase of ld. CIT(A)-III, Jaipur dated 16.12.2015 for Assessment 2012-13 wherein the assessee has challenged the action of ld year. CIT(A) in confirming the dis allowance of exemption of Rs. 30,00,000/- claimed u/s 54F regarding the Act.
Fleetingly claimed, the important points associated with the situation are that through the year in mind, the assessee has offered three lands that are agriculture to him for the sale 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 because of the Assessing Officer and it is perhaps perhaps not in dispute before us. The assessee has additionally bought a domestic property 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 claimed deduction u/s 54F for the Act and which will be in dispute before us.
throughout the length of assessment procedures, the assessee had been expected to demonstrate cause as to the reasons the reported u/s 54F of this Act, 1961 might not be disallowed, given that home had not been owned within the title of assessee. Responding, the assessee presented that the consideration for such home ended up being settled of payment of advance of the assessee received from Narvik Nirman & Financiars Pvt. Ltd. plus it ended up being further submitted that the brand new house that is residential not be purchased because of the assessee in the own title nor is it necessary so it must certanly be bought solely in the title. It absolutely was submitted that the assessee has not yet purchased the house that is new the title of the complete stranger and entire investment has arrived from the supply of the assessee and there was clearly no share through the assessee’s spouse. The distribution of this assessee ended up being considered not found acceptable towards the Assessing Officer. Depending on Assessing Officer, the home that has been offered had been of the assessee whereas the reinvestment in home (residential home) happens to be built in the name of Smt. Nikita Jain, spouse associated with the assessee. It had been further held because of the AO that Smt. Nikita Jain, spouse associated with the assessee, is having her PAN and filing her return of income which will be also evaluated to taxation, therefore, according to income tax provisions, husband and spouse both could never be thought to be solitary entity while the benefit of investment produced by a person assessee can’t be provided to another asian mail order bride specific assessee. The AO reference that is further drawn the conditions of Section 54F for the Act and held that to claim deduction, the investment in brand brand new asset should always be when you look at 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 have one or more domestic home, apart from brand brand new asset, regarding the date of transfer of this initial asset. Consequently, for those two reasons, the claim regarding the assessee u/s 54F for the I.T.Act, 1961 had been disallowed.
Being aggrieved, the assessee carried the situation in appeal prior to the ld CIT(A) and presented that the acquisition of an innovative new domestic home has become bought by the assessee.
But, it’s not especially needed beneath the statutory law that your house must be bought when you look at the title of assessee just. It had been further contended that liberal construction must certanly be fond of conditions of section 54F for the Act of course substantive requirement are satisfied, benefit provided by the Parliament shouldn’t be removed for tiny and inconsistencies that are irrelevant. 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, in 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 brand new residential household need not be purchased by the assessee inside the title nor is it necessary so it should really be purchased and exclusively in their title. Further, reliance had been added to your choice of Honorable Madras High Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in fact the homely household ended up being bought within the name associated with the assessee’s spouse, deduction under area 54 was 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 part 54 associated with the Act, it had been held that your message ‘assessee’ should be offered an extensive and interpretation that is liberal as to incorporate their appropriate heirs additionally. Further, reliance ended up being added to your decision of Honorable Karnataka tall Court within the instance of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it absolutely was held that where in fact the entire consideration has flown from her spouse, simply because either in the purchase deed or within the bond, her husband’s title can be mentioned, the assessee can’t be denied the advantage of deduction u/s 54 and 54EC of this Act. Further, reliance ended up being put on 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 of the Act, it had been held that where in fact the assessee has included the title of their spouse plus the home happens to be purchased jointly into the names, it could perhaps perhaps not make a difference additionally the conditions stipulated in section 54F stand fulfilled.
The ld. CIT(A) but relied regarding the decision of Honorable Rajasthan High Court in the event of Kalya vs. CIT (251 CTR 174) wherein into the context of section 54B associated with the Act, it had been 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 when you look at the said choice, it had been held that the word ‘assessee’ utilized in the IT Act has to be offered 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 decision 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.
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 decision that is recent of 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 when you look at the context of section 54B, it absolutely was held that in which the investment is manufactured within the title regarding 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 Bench that is co-ordinate vide 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 has now verified the denial of deduction u/s 54B of the Act. In 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 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 purchase associated with property eligible u/s 54B belonged to the appellant just and just the authorized document had been performed into the title o f the spouse and additional the spouse hadn’t split income source.”
The Honorable Rajasthan tall Court, after considering its previous choice in the event of Kalya vs. CIT(supra) and also the several other choices of Honorable Delhi tall Court, Honorable Madras High Court, Honorable Karnataka High Court, Honorable Punjab and Haryana tall Court, and Honorable Andhra Pradesh High Court, as additionally relied upon by the assessee, has held it is the assessee who may have to get which is maybe not specified within the legislation that the investment will be within the title associated with assessee and where in actuality the investment is created within the title of wife, the assessee will be qualified to receive deduction and has hence determined the situation in preference of the assessee. The appropriate findings associated with the Honorable Rajasthan tall Court are included at para 7.2 and 7.3 of the 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.