TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1053
X X X X Extracts X X X X
X X X X Extracts X X X X
.... read with section 147 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"] by the Assessing Officer, Ward 1(2)(2), Vadodara [hereinafter referred to as "Assessing Officer or AO"], dated 22.11.2019. 2. Facts of the Case 2.1 The brief facts of the case as emanating from the record are that the assessee is an individual deriving income from house property, capital gains and income from other sources. The return of income for the year under consideration was not originally filed. Subsequently, the case was reopened by issue of notice under section 148 of the Act on 26.03.2019, and in response, the assessee filed return of income on 29.04.2019, declaring total income of Rs. 15,24,000/-, which included income from house prope....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was issued proposing restriction of indexed cost. In respect of claim of deduction under section 54, the assessee had claimed exemption of Rs. 53,78,500/- on investment in purchase of a residential property in the name of his wife, Smt. Shreya Rajesh Patel. The AO noted that although the assessee had made the payment, the property was not purchased in his own name, and hence, as per the plain reading of section 54, the claim was not admissible. 2.5 On assessee's objection to adoption of jantri value, the matter was referred to the Departmental Valuation Officer under section 50C(2). The Valuation Officer determined the value of the property at Rs. 1,67,82,104/-. Thereafter, the AO recomputed the long-term capital gain as under: Parti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Courts and ITAT holding that purchase in spouse's name with assessee's own funds does not disentitle exemption. Written submissions were filed on the ITBA portal on 24.03.2021 and 27.06.2025, along with purchase deed and construction details of the new house. 2.10 The learned CIT(A), however, did not find merit in the assessee's claim. The appellate authority observed that the language of section 54 is clear that the assessee must himself purchase or construct the residential house to claim exemption. Placing reliance on the ratio laid down by the Hon'ble Supreme Court in Commissioner of Customs (Import), Mumbai v. Dileep Kumar & Co. [Civil Appeal No. 3327 of 2007, dated 30.07.2018], the CIT(A) held that exemption provisions must be stri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ore, taken up for hearing ex-parte qua the assessee, and is being disposed of after hearing the learned Departmental Representative and perusing the material available on record. 4. The learned Departmental Representative strongly supported the orders of the lower authorities. He submitted that the Assessing Officer had correctly denied the claim of deduction under section 54 of the Act, since the new residential property was not purchased in the assessee's own name but in the name of his wife. It was argued that section 54 requires strict compliance and does not permit exemption unless the new asset is purchased by the assessee himself. The learned DR further pointed out that the Commissioner of Income Tax (Appeals), while dealing with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....long-term capital gain at Rs. 62,60,142/- but pressed for deduction under section 54. In support, written submissions were filed before the first appellate authority on 24.03.2021 and again on 27.06.2025, accompanied by purchase deed and construction details of the new property, wherein reliance was placed upon various judicial precedents, including decisions of different High Courts and Benches of the Tribunal, holding that exemption under section 54/54F is admissible where the investment is made by the assessee, even though the purchase deed is in the name of the spouse. 5.2 We note that the learned CIT(A), while adjudicating the matter, has extensively relied upon the principle of strict interpretation of exemption provisions and refe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(A) has not reconciled or distinguished these binding judicial precedents while dismissing the assessee's appeal. 5.5 In view of the above, the controversy before us narrows down to whether the assessee's case is covered by the ratio of the above High Court judgments or by the stricter interpretation adopted by the CIT(A). Since the precedents of High Courts directly on section 54 are binding and have consistently allowed such claim, subject to the condition that the investment has flown from the assessee's own funds, the issue requires fresh consideration. Since the assessee had specifically relied upon judicial precedents of different High Courts and coordinate Benches, the learned CIT(A) was obliged to consider those authorities and p....