That is an appeal filed by the assessee from the purchase of ld. CIT(A)-III, Jaipur dated 16.12.2015 for Assessment 2012-13 wherein the assessee has challenged the action of ld year. CIT(A) in confirming the dis allowance of exemption of Rs. 30,00,000/- claimed u/s 54F of this Act.
Quickly reported, the reality for the situation are that through the 12 months in mind, the assessee has offered three lands that are agriculture to him for the purchase consideration of Rs. 99,25,000. The assessee has bought another agricultural land at a consideration of Rs. 32,00,000/- for which deduction u/s 54F has been advertised and exact same had been permitted by the Assessing Officer and it is perhaps maybe not in dispute before us. The assessee in addition has bought a property that is residential 23.05.2011 for a 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 that is in dispute before us.
through the length of evaluation proceedings, the assessee was expected to demonstrate cause as to the reasons the reported u/s 54F of this Act, 1961 is almost certainly not disallowed, because the home had not been owned within the title of assessee. In response, the assessee presented that the consideration for such home had been given out of payment of advance from the assessee received from Narvik Nirman & Financiars Pvt. Ltd. also it had been further submitted that this new residential household need not be purchased by the assessee in the very own title neither is it necessary it should always be bought solely in their name. It had been submitted that the assessee has not yet purchased the brand new household in the title of a complete stranger and entire investment has arrived from the way to obtain the assessee and there clearly was no contribution through the assessee’s wife. The distribution regarding the assessee was considered although 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 was further held because of the AO that Smt. Nikita Jain, spouse associated with the assessee, is having her PAN and filing her return of income which can be additionally evaluated to taxation, therefore, depending on tax provisions, spouse and spouse both could never be considered as solitary entity and also the advantage of investment produced by a person assessee can not be provided to another assessee that is individual. The AO further drawn mention of the conditions of Section 54F associated with Act and held that to claim deduction, the investment in brand new asset must certanly be within the name of assessee himself. It had been further held by the AO that in lack of the private stability sheet for the assessee and lack of appropriate documentary evidence, it can’t be ascertained whether assessee will not obtain one or more residential household, apart from brand brand new asset, in the date of transfer associated with asset that is original. Properly, for those 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 acquisition of a brand new domestic home has become bought by the assessee.
But, it’s not especially required underneath the legislation that your house should really be bought within the name of assessee just. It had been further contended that liberal construction must be provided to conditions of section 54F for the Act of course substantive requirement are satisfied, benefit provided by the Parliament really should not be taken away for tiny and unimportant inconsistencies. Further, the assessee put reliance in the choice of Honorable Delhi tall Court in the event of CIT vs. Kamal Wahal (351 ITR 4), wherein, within the context of section 54F for the Act and get of home into the name of assessee’s spouse, it absolutely was held that the newest residential house need not http://www.sexybrides.org/asian-brides be purchased because of the assessee in his title neither is it necessary so it should really be purchased and exclusively in their name. Further, reliance ended up being added to the decision of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in fact the household ended up being bought into the title associated with the assessee’s wife, deduction under section 54 ended up being permitted. Further, reliance ended up being put on your choice of Hon’ble Andhra Pradesh tall Court in the event of belated Gulam Ali Khan vs. CIT (165 ITR 228) wherein into the context of area 54 regarding the Act, it absolutely was held that your message ‘assessee’ should be offered an extensive and liberal interpretation so as to incorporate their legal heirs additionally. Further, reliance had been added to your decision of Honorable Karnataka tall Court within the full situation of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it absolutely was held that in which the whole consideration has flown from her spouse, just because either in the sale deed or into the bond, her husband’s name can be mentioned, the assessee can’t be rejected the benefit of deduction u/s 54 and 54EC for the Act. Further, reliance had been positioned on your decision of Honorable Delhi tall Court in case of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein within the context of section 54F of the Act, it absolutely was held that where in fact the assessee has included the name of their spouse therefore the home is bought jointly within the names, it can perhaps maybe not make a difference plus the conditions stipulated in section 54F stand fulfilled.
The ld. CIT(A) but relied regarding the decision of Honorable Rajasthan tall Court in the event of Kalya vs. CIT (251 CTR 174) wherein into the context of section 54B regarding the Act, it had been held that the assessee wouldn’t be eligible to get exemption for land purchase by him when you look at the title of their son and daughter-in-law. Further into the said choice, it absolutely was held that the word ‘assessee’ found in the IT Act has to be offered a ‘legal interpretation’ and not 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 tall Court in case there is Kalya, the ld. CIT(A) upheld the rejection of claim of this assessee u/s 54F of this Act.
The ld during the course of hearing. AR reiterated the submissions created before the ld. CIT(A). Further, ld. AR additionally drawn our mention of the present decision of Hon’ble Rajasthan High Court in the event of Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others dated 07.11.2017) wherein when you look at the context of section 54B, it had been held that in which the investment is manufactured within the name of this wife, the assessee will probably be qualified to receive claim of deduction u/s 54B of the Act.
when you look at the said instance, the assessee has offered agricultural land and bought another agricultural land within the title of his spouse and reported deduction u/s 54B for the Act. The Co-ordinate Bench vide its purchase in ITA No. 333/JP/2016 dated 26.12.2016 after the decision of Honorable Rajasthan High Court in case of Kalya vs. CIT(supra) had determined the matter resistant to the assessee and it has verified the denial of deduction u/s 54B of the Act. The Hon’ble Rajasthan High Court has framed the following substantial question of law in the context of said facts, on appeal by the assessee
“Where ld. ITAT ended up being justified in disallowing the exemption u/s 54B o f the Act without appreciating that the funds used for the investment to buy associated with property eligible u/s 54B belonged towards the appellant only and simply the document that is registered performed within the title o f the wife and further the wife had not split source of income.”
The Honorable Rajasthan tall Court, after considering its earlier in the day choice in the event of Kalya vs. CIT(supra) additionally the some other decisions of Honorable Delhi tall Court, Honorable Madras tall Court, Honorable Karnataka tall Court, Honorable Punjab and Haryana tall Court, and Honorable Andhra Pradesh tall Court, as also relied upon by the assessee, has held it is the assessee who may have to get which is perhaps not specified within the legislation that the investment is usually to be into the name regarding the assessee and where in actuality the investment is manufactured within the title of spouse, the assessee will be qualified to receive deduction and it has hence determined the situation in preference of the assessee. The appropriate findings associated with the Honorable Rajasthan tall Court are included at para 7.2 and 7.3 of the purchase that are reproduced as under:-
on a lawn of investment produced by the assessee into the title of their spouse, in view associated with the decision of Delhi tall Court in Sunbeam Auto Ltd. as well as other judgments of various High Courts, your message used is assessee has got to spend, it’s not specified it is to stay in the title o f assessee.