This might be an appeal filed by the assessee resistant to the order 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.
Shortly stated, the reality associated with the case are that during the 12 months into consideration, the assessee has offered three agriculture lands belonging 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 claimed and exact same ended up being permitted by the Assessing Officer and it is not in dispute before us. The assessee has additionally bought a property that is residential 23.05.2011 for the purchase consideration of Rs. 30,00,000/- within the title of their wife, Smt. Nikita Jain, and stated deduction u/s 54F of the Act and that will be in dispute before us.
through the span of assessment proceedings, the assessee had been expected to demonstrate cause as to the reasons the claimed u/s 54F of this Act, 1961 may possibly not be disallowed, while the home had not been owned into the title of assessee. In response, the assessee presented that the consideration for such home ended up being settled of payment of advance from the assessee received from Narvik Nirman & Financiars Pvt. Ltd. and it also was further submitted that this new residential household need not be bought by the assessee in their very very own title neither is it necessary so it should always be bought solely inside the name. It absolutely was submitted that the assessee have not bought the house that is new the title of the complete stranger and whole investment has arrived out from the way to obtain the assessee and there is no share through the assessee’s wife. The submission associated with the assessee had been considered not discovered acceptable towards the Assessing Officer. Depending on Assessing Officer, the house which was offered ended up being of the assessee whereas the reinvestment in home (domestic household) happens to be built in the title of Smt. Nikita Jain, spouse for the assessee. It had been further held by the AO that Smt. Nikita Jain, wife for the assessee, is having her PAN and filing her return of earnings that will be also examined to taxation, consequently, according to tax conditions, spouse and spouse both could never be regarded as single entity additionally the advantage of investment created by a person assessee is not directed at another assessee that is individual. The AO further drawn mention of the the conditions of Section 54F associated with the Act and held that to claim deduction, the investment in brand brand new asset must certanly be within the title of assessee himself. It had been further held because of the AO that in absence of the non-public stability sheet for the assessee and lack of appropriate documentary evidence, it can’t be ascertained whether assessee will not have one or more domestic household, except that brand brand new asset, regarding the date of transfer of this initial asset. Correctly, 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 problem in appeal ahead of the ld CIT(A) and submitted that the acquisition of a brand new house that is residential become bought by the assessee.
Nonetheless, it’s not particularly required beneath the statutory legislation that your house should really be purchased into the name of assessee only. It had been further contended that liberal construction should really be provided to conditions of section 54F for the Act and when substantive requirement are satisfied www.sexybrides.org/asian-brides/, advantage issued by the Parliament should not be removed for small 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 of the Act and buy of home when you look at the name of assessee’s spouse, it absolutely was held that this new residential household need not be bought because of the assessee inside the name neither is it necessary so it must certanly be bought and exclusively inside the title. Further, reliance had been put on your decision of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in fact the house ended up being bought into the title regarding the assessee’s wife, deduction under area 54 had been permitted. Further, reliance ended up being put on your choice of Hon’ble Andhra Pradesh tall Court in the event of Late Gulam Ali Khan vs. CIT (165 ITR 228) wherein within the context of area 54 associated with Act, it had been held that the term ‘assessee’ should be offered an extensive and liberal interpretation so as to add his appropriate heirs additionally. Further, reliance had been added to your choice of Honorable Karnataka High Court into the full situation of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it absolutely was held that where in fact the consideration that is entire flown from her spouse, just because either in the purchase deed or within the bond, her husband’s title can be mentioned, the assessee is not rejected the main benefit of deduction u/s 54 and 54EC associated with the Act. Further, reliance ended up being put on your decision of Honorable Delhi tall Court in the event of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein into the context of section 54F of the Act, it had been held that where in fact the assessee has included the name of their spouse in addition to home happens to be bought jointly when you look at the names, it could perhaps not make any difference therefore the conditions stipulated in section 54F stand fulfilled.
The ld. CIT(A) but relied on 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 Act, it had been held that the assessee would not be eligible to get exemption for land purchase by him when you look at the name of their son and daughter-in-law. Further within the said choice, it absolutely was held that the word ‘assessee’ utilized in the IT Act has to be offered a ‘legal interpretation’ and not just 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. Following decision of Honorable Rajasthan tall Court in the event of Kalya, the ld. CIT(A) upheld the rejection of claim for the assessee u/s 54F of this Act.
throughout the length of hearing, the ld. AR reiterated the submissions created before the ld. CIT(A). Further, ld. AR additionally drawn our mention of the decision that is recent of Rajasthan tall Court in case there is Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others dated 07.11.2017) wherein into the context of section 54B, it absolutely was held that in which the investment is manufactured within the name of this wife, 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 after the choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT(supra) had determined the matter contrary to the assessee and it has confirmed 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 listed here substantial question 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 regarding the home eligible u/s 54B belonged towards the appellant just and just the document that is registered performed when you look at the title o f the spouse and further the spouse had not separate revenue stream.”
The Honorable Rajasthan tall Court, after considering its previous choice in the event of Kalya vs. CIT(supra) while the some other choices of Honorable Delhi High Court, Honorable Madras High Court, Honorable Karnataka High Court, Honorable Punjab and Haryana High Court, and Honorable Andhra Pradesh tall Court, as additionally 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 regarding the 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.