TaxTMI 
TaxTMI 
2017 (5) TMI 12
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....0% assessed by the AO. 3. Rival contentions have been heard and record perused. 4. Facts in brief are that the assessee carries on business in hardware and aluminum sections. During the year under appeal he has shown capital gains on sale of residential property which he owned with his wife. The property was situated at 8/12, Jai Mahavir Apartments, J. P. Road, Andheri (West), Mumbai-400053. The working of the long-term capital gains was given to the ITO. As per the working 50% was given to the assessee amounting to Rs. 51,27,500/- and after indexation capital gains accrued amounted to Rs. 43,01,665/-, the assessee has invested in a new residential house with stamp duty and registration for Rs. 42,65,856/- and on the balance Rs. 35,80....
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....e. However, the entire investment for the purchase of new property i.e. Parag, along with stamp duty and registration charges were paid by the assessee. This fact has been confirmed by the AO on page 2 of the Assessment order as under:- "The entire cost of the new property is borne by the assessee through the property is in the joint name with his brother..." 7. Since, the new house was purchased by the assessee by incorporating name of his brother, AO restricted deduction u/s.54 to the extent of 50% value of new property, however, AO did not agree with assessee's contention and restricted exemption u/s.54 to Rs. 21,32,929/- i.e., 50% of the cost of the new flat. In an appeal before CIT(A), he has directed AO to tax the entire capital....
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....0%. The question raised by the Revenue before the hon'ble High Court reads as under: "Whether the Income-tax Appellate Tribunal was correct in law in granting the exemption under section 54F. of the Income-tax Act, 1961, to the assessee for the whole consideration of Rs. 3,28,15,000 for the purpose of the new asset (the residential property) in the joint names of the assessee and his wife, and not to the extent of 5 0 per cent. share of the assessee in the new asset?" The hon'ble High Court has at pages 42 and 43 held as under: "9. At the outset, the important factual findings recorded by the Tribunal in this case are that it was the assessee who independently invested in the purchase of new residential house though in his ....
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....emain that the assessee is the actual and constructive owner of the house. In CIT v. Podar Cement P. Ltd. [1997] 226 ITR 625 (SC), the Supreme Court has also accepted the theory of constructive ownership. Moreover, section 54F mandates that the house should be purchased by the assessee and it does not stipulate that the house should be purchased in the name of the assessee only. Here is a case where the house was purchased by the assessee and that too in his name and wife 's name was also included additionally. Such inclusion of the name of the wife for the above-stated peculiar factual reason should not stand in the way of the deduction legitimately accruing to the assessee. The objective of section 54F and the like provision such as s....