TaxTMI 
TaxTMI 
2022 (5) TMI 609
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....e purchase of new residential house property, in the name of his wife Smt. Garima Singh who herself is a separate assessee and having separate source of income; and thus denied the benefit of section 54F of the Income-tax Act, 1961. 2. On the facts and in the circumstances of the case the learned CIT(Appeals), National faceless Appeal Centre, grossly erred in not properly appreciating the decisions of Hon'ble Rajasthan High Court in the case of Shri Laxmi Narayan vs. CIT D.B. Income tax appeal no. 20/2016-17-LL-1107-1117 and Mahadev Balai vs. ITO Ward-7(2) Jaipur-D.B. Income-tax Appeal no. 136/2017 dated 07/11/2017, and thereby holding that these decisions were of no help to the appellant for the reason that in these cases the wife was having no separate source of income. 3. On the facts and in the circumstances of the case the learned CIT(Appeals), National faceless Appeal Centre, was not correct in construing the provisions of section 54F and holding that the investment out of the sale proceeds of the old property required to be made in the name of assessee himself and not otherwise, despite numerous decisions of Hon'ble High Courts wherein it has been held that....
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....eeding u/s 271F and 271(1)(c) of the IT Act is hereby initiated. 5. Being aggrieved by the assessment order, the assessee preferred an appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee has reiterated its arguments in para 4 pages 2 to 7 of the order. The ld. CIT(A) for the reasons stated in his order has rejected the arguments and submissions made by the assessee. 6. The Ld CIT (A) observed that the as under : "5. Findings: 5.1 The Grounds of Appeal, the facts and circumstances of the case and the submissions of the appellant have been carefully considered. Brief facts of the case are that during the period relevant to AY. 2011- 12, the appellant sold immovable property, situated at Plot No.C-174, RICCO, Housing Colony, Sitapura, Jaipur for sale consideration of Rs. 14,75,000/- on 11.10.2010. The value of the property was evaluated Rs. 14,79,960/- by the Stamp Duty Authority. After taking benefit of Cost acquisition/ improvement, Long term capital gain worked out at Rs. 6,33,190/-.Thereafter, out of above sale proceeds, the appellant claimed investment of Rs. 7,48,000/- in purchase of residential house in the name of his wife namely, Smt Gari....
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....Act is acceptable. However, a careful perusal of the case laws pertaining to the jurisdictional Rajasthan High Court relied upon by the appellant yields the following: 1. Decision of Hon'ble Rajasthan High Court (2017) in the case of Shri Laxmi Narayan vs. Commissioner of Income-tax, Jaipur -D.B. Income Tax Appeal No. 20/2016-2017-LL-1107-17/ In the cases decided by this judgment, the facts are that exemption under Section 54B of the Act was denied without appreciating that the funds utilized for the investment for purchase of the property eligible under Section 54B belonged to the appellant only and merely the registered document was executed in the name of the wife and further, the wife had no separate source of income. Since in the instant case under appeal, the wife has separate source of income and is separate assessee as recorded by the assessing officer in the assessment order, the facts of the case are distinguishable from the present appeal. 2, Decision of Hon'ble Rajasthan High Court dated 07/11/2017, in the case of Shri Mahadev Balai V/s Income-tax Officer, War-7(2), Jaipur in D.B. Income Tax Appeal No. 136/2017 In the cases de....
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....le consideration of Rs. 1,61,09,100/. Thereafter out of the selling price, the appellant-assessee purchased land in the name of his son and daughter-in-law for a total consideration of Rs. 1,22,71,440/-. It is relevant to note that the land sold was in the name of appellant-assessee, while the land purchased was in the name of his son and daughter-in-law. 7. A bare reading of Section 54B of the Income Tax Act does not suggest that assessee would be entitled to get exemption for the land purchased by him in name of this son and daughter-in-law. In the facts and circumstances of the case also aforesaid inference has not been drawn. Same is question of fact. No substantial question of law arises in appeal. Question whether purchase was by assessee or by son, is a question of fact. 8. Secondly, the word "assessee" used in the Income Tax Act needs to be given a 'legal interpretation' and not a 'liberal interpretation', as contended by the learned counsel for the appellant. If the word 'assessee' is given a liberal interpretation, it would be tantamount to giving a free hand to the assessee and his legal heirs and it shall curtail the revenue of ....
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....f new residential house property in the name of his wife namely, Smt. Garima Singh, within the prescribed time limit as prescribed under the provisions of section 54F of the Act. Accordingly, the appellant claimed exemption u/s 54F of the Income tax Act. Consequently, no capital gain was chargeable under the head Long term capital gain on sale of above immovable property. Despite these facts, the AO while completing assessment u/s 143(3)/147 of the Act on 08/12/2018 disallowed the exemption claimed u/s 54F of the Act at Rs.6,33,190/- and added the same to the total income of the appellant as long-term capital gain, holding/observing that since the assessee made investment in immovable property in the name of his wife and the assessee and his wife are different persons as well as separate assessee the deduction claimed u/s 54F of the Act, is not allowable to the assessee. The AO was not at all justified in rejecting the exemption claimed by the appellant u/s 54F of the Act at Rs. 6,33,190/-. In support of this following facts are submitted for your kind consideration: - (i) As per the provisions of section 54F of the Income tax Act, the purchase of a new residentia....
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....9;ble Madras High Court in the case of CIT Vs Shri Natarajan (2007) 287 ITR 271 (Mad). (VI) Decision of Hon'ble Punjab & Haryana High Court in the case of CIT Vs Shri Gurman Singh (2014) 327 ITR 278. (VII) Decision of Hon'ble Karnataka High Court in the case of DIT Vs Mrs. Jennifer Bhide 349 ITR 80. The ld. CIT(A) has not given any heed to the various submission put forth before him. The decisions of Hon'ble Rajasthan High Court Jaipur in the case of Shri Mahadev Balai Vs ITO Ward-7(2) Jaipur in D.B. Income Tax Appeal No. 136/2017 & others, dated 07/11/2017 on which reliance was placed during the course of appellate proceedings in support of assessee's claim as mentioned above has not followed by the ld. CIT(A), holding that the facts of the said case are distinguishable from the case of the assessee being the wife of the assessee has separate source of income and separate assessee as recorded by the assessing officer in the assessment order. Further, the ld. CIT(A), NFAC, following the decision of Hon'ble Rajasthan High Court in the case of Shri Kalya Vs CIT (251 CTR 174) has not allowed the exemption claimed by the assessee u/s 54F o....
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....In support of this, reliance is placed on the Decision of Hon'ble ITAT Jaipur Bench Jaipur in ITA No.139/JP/2016, dated 08/12/2017, in the case of Shri Vivek Jain vs DCIT Circle-2 Jaipur-A.Y. 2012-13 (Serial no -2 of Paper Book) which is based on the decision of Hon'ble Rajasthan High Court Jaipur dated 07/11/2017 in the case of Shri Mahadev Balai Vs ITO in D.B ITA No. 136/2017. The Hon'ble ITAT Jaipur held that the assessee is eligible for deduction u/s 54F of the Act in respect of residential house property purchased in the name of his wife. In this case the property which was sold, was belonging to the assessee - Shri Vivek Jain, while the investment in new house property (residential house) made in the name of Smt. Nikita Jain wife of the assessee. It was held by the AO that the wife of the assessee is having PAN and filing her return of income which is also assessed to tax, therefore, as per the provisions of Income tax Act husband and wife could not be considered as single entity and the benefit of investment made by an individual assessee cannot be given to another individual assessee. Accordingly, it is submitted that the decision of jurisdicti....
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....was purchased by the assessee in his name and the name of the wife and the property purchased in the joint names, would not make any difference. Moreover, section 54F mandates that the house should by purchased by the assessee and it does not stipulate that the house should be purchased in the name of assessee only. (iii) Hon'ble Madras High Court in the case of CIT Vs Shri Natarajan (2007) 287 ITR 271 (Mad), allowed deduction u/s 54 of the Act in respect of a residential house property purchased in the name of assessee's wife. (iv) Hon'ble Punjab & Haryana High Court in the case of CIT Vs Shri Gurman Singh (2014) 327 ITR 278, allowed deduction u/s 54B of the Act in respect of another agriculture land purchased in the name of assessee and his son. (v) Hon'ble Karnataka High Court in the case of DIT Vs Mrs. Jennifer Bhide 349 ITR 80, allowed deduction u/s 54 and 54EC of the Act, holding that where the entire consideration has flown from husband of the assessee , the assessee cannot be denied the benefit of section 54 and 54EC of the Act, in respect of a residential house property purchased in the name of assessee's wife. In the....
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....e Act on this account is Rs. 6,33,190/-. It is further noticed that the Assessing Officer has not disputed the purchase of new house in the name of wife of the assessee though the claim was denied by the AO . Therefore , the claim of deduction U/s 54F of the Act cannot be denied merely on the ground that the new residential house was purchased in the name of his wife when the investment made by the assessee from the sale proceeds of the existing asset and yielded capital gain from the said transactions. 11. Further we taken into consideration that the Ld AR for the assesse has placed the reliance on various decisions in which exemption u/s 54/ 54F/54B/54EC of the Act has been allowed notwithstanding the fact that investment in a new residential house was made in the name of wife/brother /sons. 12. Further, we rely on the decision of the Hon'ble jurisdictional High Court in case of Shri Laxmi Naraya vs. CIT vide decision dated 07.11.2017 in D.B. Income Tax Appeal No. 20/2016 has considered and decided an identical issue in paras 7.2 & 7.3 as under:- "7.2 On the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Cou....