FULL TEXT OF THE ITAT PURCHASE IS THE FOLLOWING

This might be an appeal filed because of the assessee resistant to the purchase of ld. CIT(A)-III, Jaipur dated 16.12.2015 for Assessment Year 2012-13 wherein the assessee has challenged the action of ld. CIT(A) in confirming the dis allowance of exemption of Rs. 30,00,000/- claimed u/s 54F regarding the Act.

Shortly claimed, the reality regarding the instance are that through the 12 months in mind, the assessee has offered three lands that are agriculture to him for a sale consideration of Rs. 99,25,000. The assessee has bought another land that is agricultural a consideration of Rs. 32,00,000/- for which deduction u/s 54F has been advertised and exact same ended up being permitted by the Assessing Officer and it is maybe maybe not in dispute before us. The assessee in addition has bought a domestic home on 23.05.2011 for the purchase consideration of Rs. 30,00,000/- within the title of their spouse, Smt. Nikita Jain, and stated deduction u/s 54F of this Act and which can be in dispute before us.

through the length of evaluation proceedings, the assessee had been expected to demonstrate cause why the reported u/s 54F of the Act, 1961 is almost certainly not disallowed, once the home wasn’t owned within the name of assessee. As a result, the assessee presented that the consideration for such home ended up being paid of repayment of advance from the assessee received from Narvik Nirman & Financiars Pvt. Ltd. plus it had been further submitted that the brand new house that is residential not be bought by the assessee inside the very own title neither is it necessary so it should always be bought solely in the name. It absolutely was submitted that the assessee has not yet purchased the brand new home in the name of the complete stranger and entire investment has arrived from the supply of the assessee and there was clearly no share through the assessee’s spouse. The distribution regarding the assessee ended up being considered not discovered acceptable into the Assessing Officer. The property which was sold was belonging to the assessee whereas the reinvestment in property (residential house) has been made in the name of Smt as per Assessing Officer. Nikita Jain, spouse associated with assessee. It had been further held because of the AO that Smt. Nikita Jain, spouse associated with the assessee, is having her PAN and filing her return of earnings that will be additionally examined to income tax, consequently, depending on tax provisions, spouse and spouse both could never be regarded as solitary entity as well as the advantage of investment created by a person assessee can not be provided to another assessee that is individual. The AO further drawn mention of the provisions of Section 54F of this Act and held that to claim deduction, the investment in brand new asset must certanly be into the title of assessee himself. It was further held by the AO that in lack of the private stability sheet associated with assessee and absence of appropriate documentary evidence, it can not be ascertained whether assessee will not obtain one or more residential home https://sweetbrides.net/russian-brides/, apart from new asset, regarding the date of transfer associated with the asset that is original. Properly, of these two reasons, the claim for the assessee u/s 54F for the I.T.Act, 1961 had been disallowed.

Being aggrieved, the assessee carried the situation in appeal ahead of the ld CIT(A) and presented that the purchase of a fresh house that is residential become bought because of the assessee.

Nevertheless, it is really not particularly needed underneath the statutory legislation that the home should really be bought within the title of assessee just. It had been further contended that liberal construction ought to be directed at conditions of section 54F for the Act if substantive requirement are satisfied, advantage granted by the Parliament shouldn’t be recinded for tiny and inconsistencies that are irrelevant. Further, the assessee put reliance from the choice of Honorable Delhi tall Court in the event of CIT vs. Kamal Wahal (351 ITR 4), wherein, into the context of section 54F for the Act and get of household into the name of assessee’s spouse, it absolutely was held that the latest house that is residential not be bought because of the assessee in the title neither is it necessary so it ought to be purchased and exclusively in their title. Further, reliance ended up being put on the decision of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in actuality the household was purchased within the title for the assessee’s spouse, deduction under area 54 ended up being permitted. Further, reliance ended up being put on your choice of Hon’ble Andhra Pradesh tall Court in case of Late Gulam Ali Khan vs. CIT (165 ITR 228) wherein within the context of part 54 associated with the Act, it had been held that the term ‘assessee’ must certanly be offered an extensive and interpretation that is liberal as to add their appropriate heirs additionally. Further, reliance ended up being positioned on your choice of Honorable Karnataka tall Court into the full situation of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it absolutely was held that in which the consideration that is entire flown from her spouse, merely because in a choice of the purchase deed or in the bond, her husband’s title can be mentioned, the assessee can’t be denied the main benefit of deduction u/s 54 and 54EC associated with the Act. Further, reliance ended up being put on your choice of Honorable Delhi tall Court in the event of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein in the context of section 54F for the Act, it had been held that where in actuality the assessee has included the title of his spouse and also the home happens to be bought jointly within the names, it can perhaps not make a difference additionally the conditions stipulated in section 54F stand fulfilled.

The ld. CIT(A) but relied regarding the choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT (251 CTR 174) wherein when you look at the context of section 54B for the Act, it had been held that the assessee wouldn’t be entitled to get exemption for land purchase by him within the title of their son and daughter-in-law. Further into the said choice, it absolutely was held that the word ‘assessee’ utilized in the IT Act should be given a ‘legal interpretation’ and not really a ‘liberal interpretation, it shall curtail the revenue of the Government, which the law does not permit as it would tantamount to giving a free hand to the assessee and his legal heirs and. After the choice of Honorable Rajasthan High Court in the event of Kalya, the ld. CIT(A) upheld the rejection of claim regarding the assessee u/s 54F of the Act.

throughout the span of hearing, the ld. AR reiterated the submissions created before the ld. CIT(A). Further, ld. AR also drawn our mention of the current choice of Hon’ble Rajasthan tall Court in case there is Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others 07.11.2017 that is dated wherein when you look at the context of section 54B, it absolutely was held that where in actuality the investment is created within the title associated with spouse, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.

The assessee has sold agricultural land and purchased another agricultural land in the name of his wife and claimed deduction u/s 54B of the Act in the said case. The Co-ordinate Bench vide its purchase in ITA No. 333/JP/2016 dated 26.12.2016 following a choice of Honorable Rajasthan tall Court in case of Kalya vs. CIT(supra) had determined the problem resistant to the assessee and contains verified the denial of deduction u/s 54B of the Act. When you look at the context of said facts, on appeal by the assessee, the Hon’ble Rajasthan tall Court has framed the following significant question of legislation:

“Where ld. ITAT ended up being justified in disallowing the exemption u/s 54B o f the Act without appreciating that the funds used when it comes to investment to buy associated with the home eligible u/s 54B belonged to your appellant only and simply the subscribed document ended up being performed within the title o f the spouse and additional the spouse hadn’t split revenue stream.”

The Honorable Rajasthan tall Court, after considering its earlier in the day choice in the event of Kalya vs. CIT(supra) plus the some other choices of Honorable Delhi High Court, Honorable Madras tall Court, Honorable Karnataka tall Court, Honorable Punjab and Haryana tall Court, and Honorable Andhra Pradesh High Court, as also relied upon by the assessee, has held it is not specified in the legislation that the investment is to be in the name of the assessee and where the investment is made in the name of wife, the assessee shall be eligible for deduction and has thus decided the matter in favour of the assessee that it is the assessee who has to invest and. The appropriate findings of this Honorable Rajasthan tall Court are included at para 7.2 and 7.3 of their purchase that are reproduced as under:-

The word used is assessee has to invest, it is not specified that it is to be in the name o f assessee on the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Auto Ltd. and other judgments of different High Courts.