AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1254
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....That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that for the purpose of claiming exemption under section 54F of the Income tax Act, 1961, the investment in new asset cannot be made in the name of the wife of the Appellant 4. That on the facts and circumstances of the case the Ld. CIT(A) has erred in holding that investment in new property was not traceable to the sale proceeds received on account of sale of the original property. 5. That on the facts and circumstances of the case and in law, the order passed by the Ld. CIT(A) violates judicial discipline in as much the Ld. CIT(A) did not follow the law laid down by the coordinate bench of Flon'ble Delhi Tribunal as upheld by the Hon'ble jurisdictional Delhi High Court. 6. That on the facts and circumstances of the case an in law, the Ld. CIT(A) erred in law in not adjudicating upon the claim of exemption under section 54F of the Act made by the Appellant as regards the consideration of Rs. 200,000 received by the Appellant in cash." 2. The facts in brief of the case are that the assessee a Chartered Accountant by profession, filed return of income for the year under considerat....
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....efore, the assessee fulfilled the condition of section 54F of the Act of owning not more than one residential house. However, the Ld. CIT-(A), observed that neither the investment in the new residential house property was made in the name of the assessee nor the investment was traced to the sale proceeds received from sale of the property. According to him, the sale proceeds of the property have gone to different accounts maintained in the joint name of the assessee and his father, whereas the new residential house property has been purchased out of the loan taken from the bank in the joint name of the wife of the assessee and the assessee. According to the Ld. CIT-(A), wife of the assessee, is an independent assessee and the loan was disbursed directly to the vendor 'Smt Salochna Goyal' and to the 'wife of the assessee'. Further, the learned CIT-(A) observed that the source from which loan has been paid, was not produced before him. In view of the observations the learned CIT-(A) held that the assessee was not entitled for deduction under section 54F of the Act. Aggrieved with the finding of the Ld. CIT-(A), the assessee is in appeal before the Tribunal raising the grounds as repr....
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....or in loan agreement, it cannot be established that investment in the new property has been made by the assessee. He supported the finding of the learned CIT-(A) that wife of the assessee is an independent taxpayer and the assessee has also not furnished any evidence of repayment of loan by him except filing an affidavit by his wife. The Ld. counsel further submitted that the claim of investment made in the new residential property in excess of Rs. 1.35 crores, is towards purchase of air conditioners and other furnishing items and which cannot be treated as investment towards construction of the property and therefore that amount is also not eligible for deduction under section 54F of the Act. 5.3 We have heard the rival submission and perused the relevant material on record. We find that the Ld. CIT-(A) has adjudicated the issue in dispute from para 5.7 to para-5.9 of the impugned order as under: "5.7 The documents of purchase of Saket Property were perused and these showed in that property was purchased in name of Mrs. Manisha Kishore and not in the name of the appellant. Therefore, vide order sheet entry dated 11.02.2014 was asked to explain why the exemption under Section 54F....
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....he wife has given an affidavit stating that the total consideration for the property is Rs. 1,60,00,000/-, however as per the Agreement to Sell the property has been purchased and paid for as under:- Cheque/ P.O. No. Date Drawn on Amount 931654 21.05.2008 HDFC Bank, K.G. Marg, New Delhi 1,10.00,000/- 705940 30.05.2008 Standard Chartered Bank. Preet Vihar, New Delhi 15,00,000/- The loan vide which the above payment has been made has been taken is in joint name and though the appellant has claimed that the payment in respect of the loan is being done from his own sources, but no such evidence has been filed. The bank account is also jointly held by the appellant with his wife. The High Court has held that the entire sale proceeds in respect of the property should have been invested in purchase of the new asset. The appellant has claimed that the proceeds of the property has been received as under and the payment for the new asset has been made as under: S. No. Date Narration 1 Cheque No. & date Payments Receipts Remarks 12. 07.01.08 Part Payment for Saket 8453 1000000 No such evidence in the sale agreement 13. 16.01....
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....khs on 16/01/2008 c) payment of Rs. 1,70,000 on 29/05/2008 for purchase of air conditioners 5.3.2 The contention of the Revenue is that the above payments are not towards construction/renovation of the new property. 5.3.3 The fact that investment of Rs. 1,30,31,250/- in the new property has been made exclusively in the name of the wife of the assessee and the assessee is not even the joint owner of the property, is not disputed. Further, the fact that wife of the assessee is an independent assessee is also not disputed. 5.3.4 Further, we note that Hon'ble Delhi High Court in the case of CIT Vs. Ravindra Kumar Arora (supra) has held that section 54F does not require that the new property should be purchased in the name of the assessee. The relevant finding of the Hon'ble High Court is reproduced as under: "7. Plain reading of the aforesaid provision indicates that in order to get benefit of this Section, the assessee should, inter alia, "purchase" a house. As per the Revenue, this house has to be purchased in the name of the assessee only and benefit is not given if it is purchased by the assessee jointly with his wife. 8. At the outset, important factual findings recorded by....
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.... Section 54 is to provide impetus to the house construction and so long as the purpose of house construction is achieved, such hyper technicality should not impede the way of deduction which the legislature has allowed. Purposive construction is to be preferred as against the literal construction, more so when even literal construction also does not say that the house should be purchased in the name of the assessee only. Section 54F of the Act is the beneficial provision which should be interpreted liberally in favour of the exemption/deduction to the taxpayer and deduction should not be denied on hyper technical ground. Andhra Pradesh High Court in the case of Late Mir Gulam Ali Khan Vs. CIT, (1987) 165 ITR 228 (AP) has held that the object of granting exemption under Section 54 of the Act is that an assessee who sells a residential house for purchasing another house must be given exemption so far as capital gains are concerned. The word "assessee" must be given wide and liberal interpretation so as to include his legal heirs also. There is no warrant for giving too strict an interpretation to the word "assessee" as that would frustrate the object of granting exemption. 11. We a....
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.... repayment of loan by him. Thus, we conclude that investment in the new property worth Rs. 1,30,31,250/- has not been made by the assessee. In view of the above facts and circumstances, we are of the opinion that finding of the Ld. CIT-(A) with regard to the investment of Rs. 1,30,31,250/- in new property is well reasoned and we do not find any error in the said finding and accordingly uphold disallowance of deduction under section 54F of the Act in respect of the said investment of Rs. 1,30,31,250/-. 5.4 The assessee has claimed investment of Rs. 1.60 crore in the new property, whereas the Assessing Officer and the ld. CIT-(A) has observed that as per the registration deed, stamp duty and brokerage, only investment of Rs. 1,30,31,250/- has been made in the new property and balance amount has been invested in purchase of air conditioners and other items of furnishing . 5.5 The Ld. counsel referred to page 96 to 98 of the paper book, which is a copy the finishing agreement between the assessee and Mrs. Salochna Goyal, seller of new property, and submitted that the assessee paid Rs. 10 lakh on 07/01/2008 and Rs. 20 Lacs at on 13/01/2008 to Mrs. Salochana Goyal for carrying out wood....
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....ound no. 7, the appellant has agitated against not allowing exemption under Section 54F on the amount of Rs. 2 lacs received in cash as part of the sale consideration. This ground is already covered above as the appellant is not entitled for deduction under Section 54F. Besides specifically in regarding to Rs. 2 lacs the appellant had not shown the sale proceeds received in cash and therefore is further not entitled to deduction under section 54F." 7.2 Before us, the learned counsel of the assessee submitted that investment in the new property, being in far excess of the long-term capital gain and therefore, deduction under section 54F of the Act on the cash component i.e. Rs. 2 Lacs, of sales consideration should also be allowed. 7.3 Ld. Sr. DR, on the other hand, relied on the order of the lower authorities. 7.4 We have heard the rival submission and perused the relevant material. Though the assessee has disclosed sale consideration of only Rs. 50 Lacs in the return of income filed, but the Assessing Officer on enquiry from the purchaser of the property found that sale consideration was Rs. 52 lacs and accordingly he made addition of Rs. 2 lacs to the long-term capital gain. ....