TaxTMI 
TaxTMI 
2017 (1) TMI 901
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....ncluding that even if the new asset was purchased in joint name of assessee's wife and daughter in law, the condition regarding purchase of new asset is fulfilled u/s 54F of the Act." 2. Briefly stated, the facts are that the assessee an individual filed return of income on 19.08.09 declaring income of Rs. 9,10,790/-. In the return of income filed the assessee claimed deduction under section 54F against sale of two properties and purchase of a new property. The assessment was completed on 30.12.2011 under section 143(3) of the Act determining the income of the assessee at Rs. 1,24,25,400/-. While completing the assessment, the Assessing Officer denied deduction under section 54F holding that the house i.e. flat Nos.2301A and 2401A in Lokhandwala Residency Tower, Worli is not a single house, therefore on the date of transfer of original asset assessee owns more than one residential house other than the new asset and therefore the assessee has not complied with the provisions of section 54F of the Act and not entitled for deduction. The second objection of the Assessing Officer for denying the claim for deduction under section 54F was that the new property purchased by the ass....
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....e only. Against this order the Revenue is in appeal before us. 5. The Ld. D.R. vehemently supports the order of the Assessing Officer in denying deduction under section 54F to the assessee and submits that the duplex flat cannot be considered as a single unit as it has two floors and therefore to be considered as two separate houses. He further supporting the assessment order submits that when the property is not registered in assessee's name no deduction can be allowed under section 54F. 6. The Ld. Counsel for the assessee vehemently supported the orders of the Ld. CIT(A). Further, the Ld. Counsel for the assessee referring to page 36 of the paper book which is the agreement for sale of Lokhandwala property submitted that what was purchased was pent house consisting of 4 bed rooms, hall, kitchen, dining area and which is nothing but duplex flat having attached terraces. He submits that this flat was purchased as one unit by common agreement. He further submits that pent house is always sold as one unit by the builder since it is constructed accordingly having common kitchen and living room. Therefore, he submits that it is not possible to split into two flats separately. Fur....
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....s of account, entire purchase consideration along with other expenses, stamp duty, registration, corporation tax and legal expenses have been paid by the assessee. No amount has been contributed by the wife or daughter in law. All the payments were made through banking channels as is evident from the assessment order itself. The Ld. Counsel for the assessee further submits that the Revenue is assessing the rented income from the said new property in the assessee's hands. Therefore he submits that in such circumstances there is no justification in rejecting the assessee's claim under section 54F. 8. Further placing reliance on various decisions the Ld. Counsel submits that for allowing deduction under section 54F house property should be purchased by the assessee but it does not stipulate that house should be purchased in assessee's name. For the above proposition the Ld. Counsel for the assessee placed reliance on the following decisions: 1. CIT vs. Ravindra Kumar Arora [15 taxmann.com 307 (Delhi)] 2. CIT vs. Kamal Wahal [30 taxmann.com 34 (Delhi)] 3. DIT(International Taxation) vs. Mrs. Jennifer Bhide [15 taxmann.com 82 (Kar)] 4. CIT vs. V. Natarajan [154 taxman 399 (M....
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....d the entire consideration was paid by him along with the Stamp Duty and corporation tax at the time of registration of Sale Deed. However, no amount was contributed by his spouse towards purchase of the house. After discussing in detail the primary requirements for claiming deduction and the fact that the consideration received towards sale of property was invested in the new asset and after discussing the intention of the legislature in introducing section 54F as explained in Board's Circular No. 346 dated 30-06-1982, which was for encouraging house construction, the Ld. AR relied on a number of decisions in his favour to buttress his claim that even if the house was purchased in joint name, deduction u/s. 54F was available. 24.6 It is seen that vide Purchase Agreement dated 25-09-2009, the Udaipur property was purchased by the appellant in his wife's and daughterin- law's name, which was also explained to the Ld AO vide letter dated 16-12- 2011 stating as under: "As explained in my letter dated 28-11-2011, I have purchased the property in the name of my wife as benamidat. The transaction is of benami nature, which can be confirmed, in view of the below fa....
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....in the name of the spouse, the assessee could claim exemption 54F if payment for purchase of the new house was made by the assessee as the eligibility for availing deduction was satisfied and merely because the title deed contained the name of the spouse, the same could not be denied. 2.4.12 As regards the Ld. AO's observation that the appellant was already having two house properties and hence, the new house property at Udaipur was his third house, it has been stated that the appellant's flat in Lokhandwala Residency Tower, Worli is a duplex which is internally connected by a stair case and there is only one kitchen and one hall in the said flat. Further, there was a single agreement for the purchase of the said flat and the said Agreement mentioned that this flat has been sold as a single unit as a duplex flat. Hence, relying on the Special Bench decision of the Mumbai ITAT in the case of ITO Vs. Sushila Jhaver, 107 lTD 327 it has been arugd that the duplex flat in question should be treated as only one house and hence, there was no conflict with the claim of deduction made by the appellant u/s. 54F in so far as these objections raised by the Ld. AO is concerned. In th....
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.... view of the same, appel lant ' s c l aim for deduc t ion u/ s . 54F i s sustained and the ground raised is allowed. I am also fortified in this view by the deci s ion of Hon'ble ITAT Chennai in the case of Ramachandran Vs . ITO 1TA/941/Mds/2011 dated 24-01-2012 where it has been interalia held as under: "In the instant case, the appellant has apparently satisfied the ultimate objective of the section by investing in a residential house by way of construction within the time allowed u/s. 54. What the appellant has failed to do is to make an investment in the capital gains account scheme as required u/s. 54(2) within the time allowed for furnishing the return u/s. 139(1). This the appellant contends is only a technical breach. The appellant apparently intended to invest in a residential house which is obvious from the fact that he acquired the land within a short time after the end of the previous year and before the time allowed for fi ling the return and commenced construction later on the said land which was completed within the time al/owed u/s. 54(1). These acts of the appellant clearly go to show that the appellant always intended to invest in a residential ho....
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.... "(d) We find no fault with the order of the Tribunal which has upheld the finding of fact of the Commissioner of Income Tax (Appeals) to the effect though the respondent-assessee had purchased flat Nos. 416A and 516A it was only purchase of one residential house. Further, the Tribunal held that two flats were joined together before the respondent assessee became the owner of the two flats. The Certificate from the society also established the fact that two flat Nos. 416A and 516A were joined together and were considered as one residential house. These concurrent findings of fact by the Commissioner of Income Tax (Appeals) and the Tribunal have not been shown to be perverse or arbitrary. Further, Section 54 of the Act exempts capital gain to the extent the consideration is paid for the purpose of a residential house. Consequently, where respondent-assessee has acquired one residential house consisting of two flats, it cannot be said the respondent assessee had purchased two residential houses. In view of the above, we find that question (e) and (f) also do not raise any substantial question of law. Therefore, the appeal is dismissed with regard to question (e) and (f) above. ....