Case Law Details
Shri Vivek Jain Vs. DCIT (ITAT Jaipur)
Throughout the span of evaluation procedures, the assessee had been expected showing cause as to the reasons the reported u/s 54F of the Act, 1961 might not be disallowed, because the home had not been owned when you look at the title of assessee. In reaction, the assessee presented that the consideration for such home had been paid of repayment of advance belonging to the assessee received from Narvik Nirman & Financiars Pvt. Ltd. also it had been further submitted that the brand new house that is residential not be bought by the assessee in their very very own title neither is it necessary so it ought to be bought solely in the title.
It had been submitted that the assessee have not bought the brand new household in the title of a complete stranger and whole investment has arrived out from the way to obtain the assessee and there was clearly no share through the assessee’s spouse. The distribution of this 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, wife regarding the assessee.
It had been further held by the AO that Smt. Nikita Jain, spouse of this assessee, is having her PAN and filing her return of income which can be additionally examined to taxation, consequently, according to tax conditions, spouse and wife both could never be thought to be single entity therefore the good thing about investment created by a person assessee can’t be fond of another assessee that is individual.
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 brand brand new asset must be within the title of assessee himself. It had been further held by the AO that in lack of the non-public stability sheet associated with assessee and lack of appropriate documentary evidence, it is not ascertained whether assessee will not have one or more domestic household, except that brand brand new asset, in the date of transfer regarding the asset that is original. Appropriately, of these two reasons, the claim of this assessee u/s 54F for the I.T.Act, 1961 ended up being disallowed.
Contention of Appellant
Assessee contends that buy of a unique house that is residential become bought because of the assessee. But, it is really not particularly needed underneath the legislation that your house must be bought into the title of assessee just. It had been further contended that liberal construction should always be fond of conditions of section 54F for the Act if substantive requirement are satisfied, advantage issued by the Parliament shouldn’t be recinded for tiny and inconsistencies that are irrelevant.
Further, the assessee put reliance regarding the choice of Honorable Delhi High 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 this new residential house need not be bought by the assessee inside the name neither is it necessary so it should always be bought and exclusively in his 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 actuality the homely home had been bought within the name associated with the assessee’s spouse, deduction under area 54 was allowed.
Further, reliance had been positioned on your choice of Hon’ble Andhra Pradesh tall Court in the event of belated Gulam Ali Khan vs. CIT (165 ITR 228) wherein within the context of area 54 associated with Act, it had been held that the phrase ‘assessee’ should be offered a broad and interpretation that is liberal as to add their appropriate heirs additionally.
Further, reliance ended up being put on 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 in which the whole consideration has flown from her spouse, simply because either in the purchase deed or within the bond, her husband’s title can also be mentioned, the assessee can not be rejected 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 case of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein within the context of section 54F for the Act, it absolutely was held that where in fact the assessee has included the name of their spouse while the home is bought jointly when you look at the names, it might perhaps not make a difference additionally the conditions stipulated in section 54F stand fulfilled.
Held by ITAT
Hon’ble Rajasthan tall Court in the event of 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 had been held that where in fact the investment is created into the title for the spouse, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.
In light of appropriate idea so laid straight down because of the Honorable Rajasthan tall Court in the event of Mahadev Balai (supra), in which the investment into the brand new home home has flown through the assessee, that will be maybe not in dispute when you look at the instant instance, just given that the newest domestic home home happens to be bought by the assessee when you look at the title of their spouse, exactly the same may not be basis when it comes to denial of deduction claimed u/s 54F regarding the Act.