2020 (4) TMI 217

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....aw is required to be quashed. 2. In any case and without prejudice the order having been passed in total disregard of and in violation of the principles of natural justice, makes the order bad in law and liable to be quashed. 3. In any case and without further prejudice, the CIT (Appeals), Bengaluru-2 has erred in : (a) Disallowing exemption u/s 54F amounting to Rs. 12,49,550. (b) Consequent to the addition, the learned CIT (Appeals), Bengaluru-2 has imposed the tax liability including interest of Rs. 3,06,465. 4. The learned CIT (Appeals), Bengaluru-2 has erred in making various observations and coming to various conclusions that the investment in the name of spouse does not qualify for exemptio....

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.... and written submissions filed by the appellant. The appellant was a joint owner of residential immovable property. During the year the appellant sold a residential property and received her share of sale consideration of Rs. 58,70,000/-. The share of cost of acquisition of the said property was of Rs. 36,84,683/-. The indexed cost of acquisition of the said property is Rs. 46,75,050/-. The appellant has claimed the entire LTCG of Rs. 11,94,950/-as exempt from tax u/s.54F by purchasing a new residential property in the name of her husband. The Assessing Officer has concluded that the provisions of section 54 do not provide for investment in the name of husband/spouse and therefore the exemption u/s 54 was disallowed. Appellant plac....

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....grounds appeal are hereby dismissed." 5. I have considered the rival submissions and perused the material on record. In this case the assessee sold property situated at Corporation No.13, Narayanaswamy Iyengar Street, Gandhinagar, Bengaluru on 17.02.2016 and received her share of consideration of Rs. 58,70,000. The assessee claimed exemption u/s 54F of the Act, by showing that the assessee has acquired a new residential property situated at 25 & 26, 5th Cross, Gandhinagar, Bengaluru for a consideration of Rs. 1,35,38,200 on 09.06.2015. The said property was jointly held by the assessee with the following persons, viz., (i) Sri. Manikchand Baldota, (ii) Smt.Maina Baldola, and (iii) Sri.Dhanpal I.Sakaria. Shri Dhanpal I.Sakaria is the husb....

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....ee. The basic condition is to invest the capital gains in new residential house. Further, the jurisdictional High Court in the case of Deputy Commissioner of Income-tax v. Mrs.Jennifer Bhide [(2012) 349 ITR 80 Karn.)] wherein it was observed that when the capital gain arises from the transfer of long term capital assets to an assessee and the assessee has within the period of one year before or two years after the date on which the transfer took place, purchased or within the period of three years after the date of construction of a residential house, then instead of capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the provisions of section 54....