TaxTMI 
TaxTMI 
2022 (1) TMI 601
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.... Tribunal that exemption under section 54F is not allowable if the assessee is in possession of a residential house on the date of transfer of the original asset is irrelevant and contrary to the provisions of section 54F and hence perverse and contrary to law? 3. Whether, the reasoning of the Tribunal that even though residential house at HAL 2nd Stage, Kodihalli extension, Bangalore was gifted vide registered gift deed by the assessee to his son and wife on 3.1.2012, assessee will be in possession of the said house on 10.4.2012 being date of transfer of land, is irrelevant for the purpose of exemption under Section 54F and hence perverse and contrary to law? 4. Whether, the reasoning of the Tribunal that exemption claimed by the appellant under section 54 for residential house purchased in the name of wife of the appellant and the decision in the case of CIT v M J Sivani (2014) 46 taxmann.com 170 (Karnataka), for denying exemption under section 54F, is perverse and contrary to law? 2. The assessee, a salaried person working in M/s IGUS India Private Limited, had filed a return of income showing the capital gains for the assessment year under consideration. CLAIM OF T....
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.... 1.5 Crores from M/s. Fashion Jewellery for sale of residential house at Angamaly, Kerala - sale deed registered on 08.10.2012, the assessee repaid housing loan to the extent of Rs. 60 Lakhs on the very same day. The remaining housing loan was repaid by the assessee from his bank account. 5. The Assessing Authority denied the claim made under Section 54 and 54F of the Act and an order under Section 143(3) of the Act was passed by disallowing exemption claimed under Sections 54 and 54F of the Act amounting to Rs. 1,98,47,434/- and Rs. 49,08,708/- respectively. Being aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), which came to be partly allowed, allowing the exemption partly under Section 54 to the extent of Rs. 44,61,565/-, confirming the denial of exemption under Section 54F of the Act. On further appeal before the Tribunal, appeal under Section 54 of the Act came to be allowed inasmuch as the investment made in the name of the asssessee's wife but was remanded to CIT[A] regarding eligibility of Rs. 60 lakhs and the payment towards the expenses claimed to the Assessing Officer. In the miscellaneous petition eligibility of Rs. 90....
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....L II Stage, Kodihalli Extension, Bangalore, to his wife on 03.01.2012 well before the transfer of land and thus he was no more a legal owner of the same on 10.04.2012. The residential house purchased in the name of his wife, vide registered sale deed dated 08.12.2011, was not owned by the assessee as on 10.04.2012 and these vital aspects have been lost sight of, by the Tribunal in denying exemption under Section 54F of the Act, relying on the Co-ordinate Bench decision of this Court in the case of CIT v M J Siwani, [(2014) 56 taxmann.com 170], without appreciating that the said decision is not applicable to the case on hand. 10. Learned counsel for the Revenue submitted that the Tribunal has given a liberal interpretation to Section 54 of the Act in coming to a conclusion as regards the investment made by the assessee in a new asset purchased in the name of his wife is concerned that there is no requirement that investment should be made in the name of the assessee only. There being no substantial material to identify to whom the payment of stamp duty was made by the assessee, the matter was remanded to the Assessing Officer for verification of the facts, which cannot be found fau....
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....gistration and other expenses claimed, an amount of Rs. 4,61,565/- was allowed. Accordingly, the claim under Section 54 was restricted to Rs. 44,61,565/-. The claim made under Section 54F of the Act was rejected. 14. On further appeal before the Tribunal by the assessee, the same was partly allowed holding that the total capital gains of Rs. 2,23,47,434/- earned by the assessee from sale of original asset, a sum of Rs. 1.00 Crore invested in purchase of the new asset that stands in the name of assessee's wife and a sum of Rs. 25.00 lakhs invested in REC bonds regarding eligibility of Rs. 60 lakhs and Rs. 90 lakhs under Section 54 requires to be decided by the Commissioner of Income Tax (Appeals). 15. Section 54 and Section 54F of the Act reads as under; "54. (1) Subject to the provisions of subsection (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and t....
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....is concerned, it is apt to refer to both the provisions i.e., Sections 54 and 54F of the Act. On a comparative study of these two provisions, it would indicate that Section 54 deals with profit on sale of property used for residence, whereas Section 54F of the Act deals with capital gain on transfer of certain capital assets not to be charged in case of investment for residential use. The proviso (a)(i) to Section 54F(1) of the Act makes a distinction from Section 54, inasmuch as the language employed, more particularly, the phrase "owns". 19. Section 27 of the Act defines "Owner of house property" for the purposes of Sections 22 to 26 of the Act. Sections 22 to 26 found in Chapter IV-C postulates the income from house property. 20. Section 27(i) is extracted hereunder for ready reference; "27. For the purposes of Sections 22 to 26- (i) an individual who transfers otherwise than for adequate consideration any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, shall be deemed to be the owner of the house property so transferred; 21. This provision would not assist th....
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....he investment of the sale consideration in acquiring the residential premises or constructing a residential premises or investing the amounts in bonds set out in section 54EC. Once the sale consideration is invested in any of these manner the assessee would be entitled to the benefit conferred under this provisions. In the absence of an express provision contained in these sections that the investment should be in the name of the assessee only any such interpretation were to be placed, it amounts to the court introducing the said word in the provision which is not there. It amounts the court legislating when Parliament has deliberately not used those words in the said section. That is the view taken by the hon'ble Madras High Court and the hon'ble Punjab and Haryana High Court and we respectfully agree with the view expressed in the aforesaid judgments." 24. The object of Section 54F of the Act is to provide impetus to the house construction. The word 'assessee' under Section 54 of the Act having been given wide and liberal interpretation so as to include his legal heirs also by judicial pronouncements, it cannot be held Section 54F also should be construed liberally. 25.....