This might be an appeal filed by the assessee from the order 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 situation are that throughout the 12 months into consideration, the assessee has sold three lands that are agriculture asian mail order bride 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 ended up being allowed because of the Assessing Officer and is perhaps not in dispute before us. The assessee in addition has bought a property that is residential 23.05.2011 for the purchase consideration of Rs. 30,00,000/- into the name of his spouse, Smt. Nikita Jain, and stated deduction u/s 54F for the Act and that will be in dispute before us.
throughout the length of evaluation procedures, the assessee had been expected showing cause as to why the reported u/s 54F of this Act, 1961 might not be disallowed, given that home had not been owned into the title of assessee. In reaction, the assessee presented that the consideration for such home ended up being paid of repayment of advance of the assessee received from Narvik Nirman & Financiars Pvt. Ltd. also it had been further submitted that the latest residential household need not be bought because of the assessee inside the very own title nor is it necessary so it should really be purchased solely in their name. It absolutely was submitted that the assessee have not bought the brand new home in the title of the complete stranger and entire investment has arrived from the way to obtain the assessee and there is no share through the assessee’s spouse. The submission for the assessee ended up being considered yet not discovered acceptable to 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 regarding the assessee, is having her PAN and filing her return of earnings that will be additionally evaluated to taxation, therefore, depending on tax provisions, spouse and spouse both could never be regarded as single entity additionally the advantage of investment produced by a person assessee can’t be directed at another specific assessee. 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 should really be into the name of assessee himself. It had been further held because of the AO that in lack of the non-public stability sheet of this assessee and absence of appropriate documentary evidence, it is not ascertained whether assessee will not have one or more domestic household, apart from brand new asset, regarding the date of transfer associated with asset that is original. Accordingly, 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 prior to 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 especially needed beneath the legislation that the home must be bought within the title of assessee just. It was further contended that liberal construction ought to be directed at conditions of section 54F for the Act of course substantive requirement are fulfilled, advantage provided by the Parliament really should not be recinded for tiny and unimportant inconsistencies. 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 when you look at the name of assessee’s spouse, it had been held that the latest house that is residential not be bought by the assessee in their title nor is it necessary so it ought to be bought and solely in their name. Further, reliance had been added to your 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 name of this assessee’s spouse, deduction under section 54 had been permitted. Further, reliance had been 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’ must certanly be given an extensive and liberal interpretation so as to add his appropriate heirs additionally. Further, reliance ended up being put on your decision of Honorable Karnataka tall Court within the full instance 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 husband, just because either in the purchase deed or into the bond, her husband’s title can be mentioned, the assessee is not denied the advantage of deduction u/s 54 and 54EC associated with 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 into the context of section 54F of the Act, it absolutely was held that where in actuality the assessee has included the name of their spouse additionally the home happens to be bought jointly within the names, it might not make a difference as well as the conditions stipulated in section 54F stand fulfilled.
The ld. CIT(A) but relied regarding the choice of Honorable Rajasthan tall Court in case of Kalya vs. CIT (251 CTR 174) wherein within the context of section 54B associated with 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 true title of his son and daughter-in-law. Further within the said choice, it had been held that the word ‘assessee’ used in the IT Act has to be provided a ‘legal interpretation’ and not a ‘liberal interpretation, since it would tantamount to providing a totally free hand to your assessee along with his legal heirs plus it shall curtail the income for the Government, that the legislation doesn’t permit. Following choice 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 for the Act.
through 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 recent choice of Hon’ble Rajasthan tall 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 where in actuality the investment is created when you look at the title regarding the spouse, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.
into the said instance, the assessee has offered agricultural land and bought another agricultural land into the title of his wife and reported deduction u/s 54B for the Act. The Bench that is co-ordinate vide purchase in ITA No. 333/JP/2016 dated 26.12.2016 following a choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT(supra) had determined the matter from 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 when it comes to investment for sale associated with the home eligible u/s 54B belonged to the appellant just and just the document that is registered performed when you look at the title o f the wife and additional the spouse hadn’t split income source.”
The Honorable Rajasthan tall Court, after considering its early in the day choice in case of Kalya vs. CIT(supra) in addition to several other decisions of Honorable Delhi tall Court, Honorable Madras tall Court, Honorable Karnataka High Court, Honorable Punjab and Haryana tall Court, and Honorable Andhra Pradesh High 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 associated with the Honorable Rajasthan tall Court are included at para 7.2 and 7.3 of their purchase which 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.