TaxTMI 
TaxTMI 
2014 (1) TMI 902
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....a house property in Road No.12 Banjara Hills, Hyderabad and claimed exemption of Rs.31,41,007 under S.54 of the Income-tax Act. The assessee's share in the property worked out to Rs.32,50,000. Subsequently, the property which was purchased at Road No.12 Banjara Hills was sold and the assessee along with other co-owners purchased property at Jubilee Hills, Hyderabad and the second house purchased was claimed to be within the specified time limit of 2 years for investment of capital gains under S.54 of the Income-tax Act. However, the Assessing Officer disallowed the claim of the assessee under S.54 during the assessment year 2005-06, holding that the assessee sold the house property within three years of purchase, and the Assessing Officer raised demand for payment of taxes on the short term capital gains. 3. The assessee represented before the CIT(A) that on similar facts, the ITAT had held in favour of the assessee in the case of ACIT V/s. Sultana Nazir (2012) (21 Taxmann 383 Chennai) and in the case of Jagari Nath Singh Lodha V/s. ITO(2004) (85 TTJ 173)-Jodhpur. The CIT(A) after having discussed the cae-laws relied on by the assessee and with respect to delay in filing the app....
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.... Bangalore Bench of the Tribunal dated 22.12.2010 in the case of Mrs.Jennifer Bhide V/s. DDIT(International Taxation Circle 1(1), Bangalore) in ITA No.1100/Bang/2010; (e) Decision of the Mumbai Bench 'F' of the Tribunal dated 6.6.2012 in Vasudeo Pandurang Ginde in ITA No.4285 & 4540/Mum/2009. 6. The Learned Departmental Representative argued that the exemption is available only when the property is purchased in the name of the assessee or his spouse. 7. We heard both the parties and perused the orders of the lower authorities and other material on record. The provisions of S.54 read as follows- "54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of thre....
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....on is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,-- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid." Undisputed facts of the case on hand are that the assessee is co-owner of a property which was purchased on 2.3.1979 for a consideration of Rs.2,25,000, and sold on 28.5.2003 for a consideration of Rs.1,70,00,000. All the co-owners purchased a property on 27.2.2004 for a consideration of Rs.1,95,00,000 and together with the registration cost of Rs.26,23,520, the total purchase cost worked out to Rs.2,21,32,520. The said property was sold by all the co-owners on 30.11.2004 for a consideration of Rs.1,95,00,000. However, on 5.1.2005 two of the co-owners namely, Mrs. Neena Dharod and Shri Mayur Dharod have entered into an agreement of sale cum irrevocable general power of attorney for a property at 8-2-293/82/A/1029 at Road No.45 Banjara Hi....
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....operty has been purchased in the name of assessee and his wife. In the case of Mrs. Jennifer Bhide (supra), the Bangalore Bench of the Tribunal has referred to the decision of the Hon'ble Madras High Court in the case of CIT V/s. V.Natarajan (287 ITR 271), where husband has sold the residential property and purchased residential property within the stipulated period in his wife's name. Considering the factual background in that case, the Madras High Court held that benefit of S.54F is available to the assessee. In this case, the grievance before the Tribunal was that the learned CIT(A) erred in law and on facts in restricting the exemption under S.54, being 50% of total investment, just because the deed is registered in joint names, ignoring the fact that the investment in the new property was made solely out of the assessee's own funds and disregarding the affidavit given by Shri Vikram Abnil Vasant Bhide to the effect that he does not have ownership interest in the property. The facts of the case are that the investment was made in the name of the assessee (Mrs.Jennifer Bhide alone), but also in the name of her husband. Hence, the situation is in no way different from the earlier....