TaxTMI 
TaxTMI 
2013 (4) TMI 636
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...., filed his return of income declaring total income of Rs. 4,71,923. During the course of assessment proceedings the Assessing Officer noted that the assessee has sold the property situated at Survey No.33/10, Plot No.10/31, Santan Cooperative Housing Society, Erandwane, Pune - 411004. He noted that while computing the capital gain the assessee has deducted an amount of Rs. 29,60,000 as cost of selling. The Assessing Officer noted that the assessee has computed the capital gains at NIL which is as under :- Sale of flat 50,00,000/- Less : Cost & selling 29,60,000/- Net sale consideration 20,40,000/- Less indexed cost & acquisition 375000-12/2/1991 with indexation @519/182 10,69,368/- 9,70,632/- Less investment of Rs.18,80,0....
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....y rejected the claim of the assessee and computed the capital gain by deducting the amount of Rs. 10 lakhs as investment in the new residential property in the name of the assessee and the indexed cost of acquisition and determined the taxable capital gain at Rs. 29,30,632/-. 6. Before the CIT(A) the assessee filed a copy of the agreement of sale and relied on the following decisions :- 1. CIT Vs. Shakuntala Kantilal reported in 190 ITR 56 (Bombay) 2. CIT Vs. Abrar Ali reported in 247 ITR 312 I(Bom.) 3. Hardiallia Chemicals Ltd. Vs. CIT reported in 218 ITR 598 (Bom.) 4. CIT Vs. Miss Proja C. Patel reported in 242 ITR 582 (Bom.) 5. Sitalpur Sugar Works Ltd. Vs. CIT reported in 49 ITR 160 (SC) 7. However, the learned CIT(A) also was no....
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.... had separated from him. 2. The learned CIT(A) failed to appreciate that : (a) The assessee's wife had separated from him in 1997 and since then, they were staying separately. She was staying in the house which was sold and she had to be provided a separate house and accordingly, providing a residence to her was an obligation on the assessee. (b) It was only after the residence was provided to her. She agreed to vacate the assessee's house and therefore this cost of a new flat for her was an encumbrance on the house which was sold by the assessee and hence, the cost of the new house to be provided to her was an allowable deduction u/s.48. (c) This liability of providing her a separate house arose out of the separation of the assessee fr....
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....nt of Rs. 29,60,000 spent by the assessee towards purchase of the flat for the residence of separated wife is an allowable expenditure being compensation to her. In his second alternate contention he submitted that the assessee can purchase two flats and will get the benefit u/s.54 of the Income Tax Act. For this proposition, he relied on CBDT Letter F.No.207/24/76-IT(A-II) dated 25-03-1977. In his third alternate contention, the learned counsel for the assessee submitted that the property purchased in the name of the wife of the assessee being higher in value should be allowed for the purpose of computation of capital gain as against the house property in the name of the assessee. In other words, he submitted that the property purchased in....
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....A) be upheld. 15. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. In the instant case, the assessee sold his residential property for a consideration of Rs. 50 lakhs and purchased two flats, one flat for his self occupation and another flat for a consideration of Rs. 29,60,000 in the name of his wife for the residence of his wife and daughter. 15.1 It is the submission of the learned counsel for the assessee that the amount incurred for purchasing the flat for the wife of the assessee at Rs. 29,60,000 should be allowed as an expenditure being encumbranc....
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....54, the purchase to be made or the construction to be put up by the assessee, should be there in the name of the assessee, in not expressly stated. Similarly even in respect of s. 54EC, the assessee has at any time within a period of six months after the date of such transfer invested the whole or any part of the capital gains in the long-term specified asset then she would be entitled to the benefit mentioned in the said section. There also it is not expressly stated that the investment should be in the name of the assessee. Therefore, to attract s. 54 and s. 54EC of the Act, what is material is the investment of the sale consideration in acquiring the residential premises or constructing a residential premises or investing the amounts in ....