TaxTMI 
TaxTMI 
2019 (8) TMI 290
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.... return filed in response to the said notice. It was noticed that the assessee had filed return of income on 18/11/2008 declaring total income of Rs. 1,80,000/- being interest income from money lending and also agricultural income of Rs. 1.00 lakh. The assessee has also shown capital gains on sale of land and claimed exemption u/sec.54F for investment/construction of house property at plot No. HIG-43, Simhapuri Layout, Visakhapatnam. The Assessing Officer after considering the details, determined the long term capital gain at Rs. 21,86,635/-. For the A.Y. 2009-10 also, the Assessing Officer initiated proceedings u/sec. 148. In response to which, the assessee filed a letter stating that she has already filed the return of income. It was noticed that the assessee filed return of income on 09/01/2013. It was noted that in the said return, the assessee had declared income from money lending business at Rs. 1,89,000/- and claimed income from capital gains as exempt u/sec. 54F. The Assessing Officer after considering the details filed, determined the capital gains at Rs. 94,44,845/-. In concise, the assessee has computed the capital gains at Rs. 7,42,508/- for the A.Y. 2008-09 and Rs.....
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....d to clarify. The AR clarified that the house was constructed in plot No. HIG-43 and that the D.No. 24-266 was subsequently allotted. It was further submitted that reference to D.No. 26-100 was to another house near the plot, and in the plan also door number mentioned as 'near D.No.26-100'. The AR further submitted that the tax payment was made for the period of 2008-09 onwards and filed the details of payment. The ld. CIT(A) after considering the GVMC tax assessment for the A.Y. 2008-09 held that the Assessing Officer is not justified in saying that the construction is not completed within the stipulated period. However, another objection raised by the Assessing Officer in respect of construction of the house is not in the name of the assessee, the ld. CIT(A) has expressed a view that the Assessing Officer is justified in denying the claim u/sec. 54F that the assessee has not constructed the house in the plot owned by her and it is constructed in the plot of the assessee's husband, therefore she is not entitled. 5. On appeal, before us, ld.AR submitted that section 54F is a beneficial provision. The word 'assessee' must be given a wide and liberal interpretation so as to inc....
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....rtain land and received sale proceeds and invested in construction of a house in plot belonging to the husband. It is a fact that the assessee and her husband are living together and also a fact that sale proceeds received by the assessee are used for construction of the house. The Assessing Officer denied the claim of the assessee only on the ground that sale proceeds ought to have been invested in her name instead of her husband name. By considering the facts and circumstances of the case, the benefit u/sec. 54F cannot be denied to the assessee simply because sale proceeds invested in a plot belonging to her husband. Section 54F is being a beneficial provision. As per the judgments of various High Courts and the tribunals where investment is made by the spouse, benefit has been allowed by construing the definition of 'assessee' liberally. 9. In the case of Pr.CIT Vs. M/s. B. Surendra Chowdary in ITTA No. 519/2017 dated 21/08/2017, the Hon'ble High Court of Telangana & Andhra Pradesh has framed the following question:- "(ii) Whether, on the facts and in the circumstances of the case, the Tribunal is correct in allowing deduction u/sec. 54F of the Act for a prope....
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.... of the assessee only. As a matter of fact, Section 54F in terms does not require that the new residential property shall be purchased in the name of the assessee; it merely says that the assessee should have purchased/constructed "a residential house". 8. This Court in the decision cited alone also noticed the judgment of the Madras High Court (supra) and agreed with the same, observing that though the Madras case was decided in relation to Section 54of the Act, that Section was in pari materia with Section 54F. The judgment of the Punjab and Haryana High Court in the case of CIT Vs. Gurnam Singh : (2014) 327 ITR 278 in which the same view was taken with reference to Section 54F was also noticed by this Court. 9. It thus appears to us that the predominant judicial view, including that of this Court, is that for the purposes of Section 54F, the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. It is moreover to be noted that the assessee in the present case has not purchased the new house in the name of a stranger or somebody who is unconnected with him. He has purch....
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....e assessee who had actually made the investment out of the consideration received towards sale of shares. The assessee has also explained the reason behind registration of the house in the name of his minor daughter. In the aforesaid factual backdrop, the decisions cited at the Bar are found to be expressing divergent view. The A P High Court in the case of Late Mir Gulam Ali Khan vs. CIT (165 ITR 228) while examining he allow ability of exemption u/s 54 of the Act held that the word "assessee‟ must be given a wide and liberal interpretation so as to include his legal heirs also. The Honourable AP High Court further held the provision contained u/s 54 of the Act also must be given a liberal interpretation. For the sake of convenience, the observation mad by the Honourable High Court is extracted hereunder:- "Relying upon the expression "assessee" occurring in section 54 of the Act, it is contended for the Department that in order to claim the exemption, the person who sold the house must be the same as the person who purchased the house, that is, the assessee must be one and the same person. The identity must be the same. We are unable to accept this contention. The ....
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....6 ITR 335 (P & H) and in the case of Prakash Vs. ITO 220 CTR 249 (Mumbai) and ITAT in the case of ITO vs. Prakash Timaji Dhanjode ITAT Nagpur 81 TTJ 694 have held a different view to the effect that for getting exemption u/s 54F, the property has to be purchased in assessee‟s name. The intention of the legislature in introducing sec. 54F as explained in Board‟s Circular No.346 dated 30th June, 1982 is for encouraging house construction. It is an encouragement given to the assessee to exchange one of the residential houses for another or where he has none to convert any of his long term assets into a residential house. The object behind such a provision is to encourage large scale house building activity or investment in house property to meet acute housing shortage in the country. Therefore, looking at the legislative intent, a liberal interpretation has to be given to section 54F which is a beneficial provision. The Hon‟ble Supreme Court in case of K.P. Verghese vs. ITO reported in 131 ITR 597 has observed in the following manner:- "A statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. Where the plain litera....