TaxTMI 
TaxTMI 
2018 (6) TMI 1879
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....Noida in the hands of the appellant since the aforesaid flat did not belong to the appellant but belonged to her husband Shri Arun Kumar Nandwani. 3. That the Ld. CIT(A), erred in not accepting the claim of the appellant that her husband Shri Arun Kumar Nandwani had already disclosed the capital gain on sale of flat no-53-B, Sector-56, Noida in his Income tax return and accepted as such by the department. 4. That the appellant's husband Shri Arun Kumar Nandwani sold flat no- 53-B, Sector-56, Noida and its sale proceeds were invested by him in the purchase of new no- 2-A, Extn-4, Floor-13(ex), Tower 2, Indirapuram, Ghaziabad fulfilling the requirement of law for getting exemption u/s 54 of the I.T. Act. That in the sale deed of the aforesaid new flat, the names of spouse (appellant) and their son Shri Rishu Nandwani was also added. 5. That without prejudice to ground no- 1,2,3 and 4, the Ld. A.O. had erred in restricting the claim of exemption u/s 54 of the I.T. Act to one-third of the alleged capital gain on the ground that three names including the name of the appellant and their son Shri Rishu Nandwani were mentioned in the sale deed of flat no- 2-A, Ex....
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....ld the action of the Assessing Officer on the ground that the sale deed revealed that the flat of NOIDA which was sold in the name of the assessee and she has not shown the transaction in her relevant return of income, and therefore, the capital gain is to be assessed in the hands of the assessee only. On this ground alone, he has upheld the initiation of proceedings u/s.147/148 also. However with regard to the claim of exemption u/s.54, he held that a benefit of exemption should be allowed only to the extent of investment done in the name of assessee and her husband and restricted the tax on capital gain to 1/3rd and benefit of 2/3rd, i.e. Rs.43,73,333/- out of 65,60,000/- has been granted. 5. Before us, the learned counsel submitted that even if it is held that the capital gain is to be assessed in the hands of the assessee, despite the fact that assessee has vehemently challenged that no capital gain should be taxed in her hand, because same has been offered by her husband in his return of income as he alone had made investment in the purchase of the earlier property, the exemption u/s.54 has to be allowed in full as the entire sale proceeds have been invested in the purchase....
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....was invested in purchase of other residential flat the claim of exemption u/s.54 was claimed by him in his return of income. The Department's stand is that, since the flat sold was standing in the name of the assessee, therefore, the Long Term Capital Gain would be taxed in the hands of the assessee. The Assessing Officer has restricted the claim of benefit of deduction u/s.54 only to 1/3rd on the ground that property sold which has been invested in the new flat was in the name of the assessee only. Ld. CIT (A) though upheld the taxability of the Long Term Capital Gain in the hands of the assessee, but held that exemption of Section 54 should be given on 2/3rd considering that Ghaziabad Development has made it mandatory that spouse name is to be included in the registry of the new property. It is not disputed that the property which has been purchased stood in the name of assessee, i.e., Smt. Uma Nandwani, her husband Shri A.K. Nandwani and their son Shri Rishu Nandwani. Even if we do not go by the other contention of the assessee that under whose hand the taxability of Long Term Capital Gain has to be seen, we find merits in the contention of the learned counsel that the exemption....
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....ditions stipulated in Section 54F stand fulfilled. It would be treated as the property purchased by the assessee in his name and merely because he has included the name of his wife and the property purchased in the joint names would not make any difference. Such a conduct has to be, rather, encouraged which gives empowerment to women. There are various schemes floated by the Government itself permitting joint ownership with wife. If the view of the Assessing Officer (AO) or the contention of the Revenue is accepted, it would be a derogatory step. 10. Even when we look into the matter from another angle, facts remain that the assessee is the actual and constructive owner of the house. In CIT Vs. Poddar Cements (P) Ltd. & Ors., (1997) 226 ITR 625 (SC), the Supreme Court has also accepted the theory of constructive ownership. Moreover, Section 54F mandates that the house should be purchased by the assessee and it does not stipulate that the house should be purchased in the name of the assessee only. Here is a case where the house was purchased by the assessee and that too in his name and wife's name was also included additionally. Such inclusion of the name of the wife for th....