It is an appeal filed by the assessee up against the purchase of ld. CIT(A)-III, Jaipur dated 16.12.2015 for Assessment 12 months 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 of this Act.
Fleetingly claimed, the reality associated with the instance are that throughout the 12 months into consideration, the assessee has offered three agriculture lands belonging 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 reported and exact same ended up being permitted because of the Assessing Officer and is perhaps not in dispute before us. The assessee in addition has bought a residential 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 for the Act and which will be in dispute before us.
The assessee was asked to show cause as to why the claimed u/s 54F of the Act, 1961 may not be disallowed, as the property was not owned in the name of https://sweetbrides.net/russian-brides/ russian brides assessee during the course of assessment proceedings. As a result, the assessee presented that the consideration for such home had been given out of payment of advance of the assessee received from Narvik Nirman & Financiars Pvt. Ltd. plus it had been further submitted that this new residential house need not be purchased because of the assessee in the very very own title nor is it necessary it should really be purchased solely in the title. It had been submitted that the assessee have not bought the house that is new the name of a stranger and whole investment has come out from the way to obtain the assessee and there is no contribution from the assessee’s spouse. The submission for the assessee had been considered yet 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 the assessee. It had been further held by the AO that Smt. Nikita Jain, spouse for the assessee, is having her PAN and filing her return of earnings that will be also examined to taxation, therefore, according to income tax conditions, spouse and spouse both could never be thought to be solitary entity therefore the advantage of investment created by an individual assessee can’t be directed at another specific assessee. The AO reference that is further drawn the conditions of Section 54F of this Act and held that to claim deduction, the investment in brand new asset should be within the title of assessee himself. It had been further held because of the AO that in lack of the private balance sheet of this assessee and lack of appropriate documentary evidence, it may not be ascertained whether assessee does not possess one or more residential household, except that new asset, regarding the date of transfer associated with initial asset. Properly, of these two reasons, the claim associated with 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 unique residential home has to be bought by the assessee.
Nonetheless, it is really not especially needed underneath the statutory legislation that the home must certanly be bought when you look at the title of assessee only. It had been further contended that liberal construction must certanly be fond of conditions of section 54F for the Act and in case substantive requirement are fulfilled, advantage issued by the Parliament shouldn’t be removed for tiny and inconsistencies that are irrelevant. Further, the assessee put reliance in the choice of Honorable Delhi tall Court in case of CIT vs. Kamal Wahal (351 ITR 4), wherein, into the context of section 54F for the Act and get of home within the name of assessee’s spouse, it absolutely was held that the brand new residential household need not be bought because of the assessee inside the title neither is it necessary it should really be purchased and solely in their name. Further, reliance had been added to your choice of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) in which the homely home had been bought when you look at the title of this assessee’s spouse, deduction under part 54 ended up being permitted. Further, reliance ended up being positioned on your decision 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 of this Act, it absolutely was held that the term ‘assessee’ should be provided a broad and interpretation that is liberal as to incorporate their appropriate heirs additionally. Further, reliance had been positioned on your decision of Honorable Karnataka tall Court within the situation of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it had been held that in which the consideration that is entire flown from her spouse, simply because either in the purchase deed or within the bond, her husband’s title can be mentioned, the assessee can’t be rejected the main benefit of deduction u/s 54 and 54EC associated with the Act. Further, reliance had been added to your choice of Honorable Delhi tall Court in the event of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein into the context of section 54F for the Act, it absolutely was held that where in fact the assessee has included the title of their spouse together with home happens to be purchased jointly into the names, it might not make a difference and also the conditions stipulated in section stand that is 54F.
The ld. CIT(A) however relied regarding the choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT (251 CTR 174) wherein into the context of section 54B associated with the Act, it absolutely was held that the assessee wouldn’t be eligible 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 has to be provided a ‘legal interpretation’ and not a ‘liberal interpretation, because it would tantamount to offering a free of charge hand towards the assessee and their appropriate heirs also it shall curtail the revenue associated with national, that the legislation will not allow. After the choice of Honorable Rajasthan tall Court in the event of Kalya, the ld. CIT(A) upheld the rejection of claim of this assessee u/s 54F for the Act.
The ld during the course of hearing. AR reiterated the submissions created before the ld. CIT(A). Further, ld. AR also drawn our mention of the decision that is recent of Rajasthan High Court in the event of Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others dated 07.11.2017) wherein into the context of section 54B, it had been held that in which the investment is manufactured when you look at the title regarding the spouse, the assessee shall 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 after the choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT(supra) had determined the problem contrary to the assessee and contains verified the denial of deduction u/s 54B of the Act. Into the context of said facts, on appeal by the assessee, the Hon’ble Rajasthan tall Court has framed the next significant concern of legislation:
“Where ld. ITAT had been justified in disallowing the exemption u/s 54B o f the Act without appreciating that the funds used for the investment for sale associated with the property eligible u/s 54B belonged to your appellant just and merely the authorized document had been performed within the title o f the spouse and additional the spouse hadn’t separate income source.”
The Honorable Rajasthan tall Court, after considering its early in the day choice in case of Kalya vs. CIT(supra) and also the other choices of Honorable Delhi tall Court, Honorable Madras High Court, Honorable Karnataka tall Court, Honorable Punjab and Haryana tall Court, and Honorable Andhra Pradesh tall Court, as additionally relied upon by the assessee, has held it is the assessee who may have to take a position which is maybe not specified when you look at the legislation that the investment will be within the title associated with assessee and in which the investment is manufactured within the title of spouse, the assessee will probably be entitled to deduction and it has hence determined the problem in preference of the assessee. The appropriate findings of this Honorable Rajasthan High Court are included at para 7.2 and 7.3 of their purchase that are reproduced as under:-
on the floor of investment produced by the assessee when you look at the title of their spouse, in view associated with the decision of Delhi High Court in Sunbeam car Ltd. along with other judgments of various High Courts, your message utilized is assessee has to invest, it isn’t specified it is to stay the title o f assessee.