It is an appeal filed by the assessee resistant to 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 regarding the Act.
Shortly reported, the important points for the situation are that through the 12 months in mind, the assessee has offered three lands that are agriculture to him for a purchase consideration of Rs. 99,25,000. The assessee has purchased another agricultural land at a consideration of Rs. 32,00,000/- for which deduction u/s 54F has been reported and exact same had been permitted because of the Assessing Officer and it is maybe 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 title of their wife, Smt. Nikita Jain, and stated deduction u/s 54F of this Act and which will be in dispute before us.
through the span of assessment procedures, the assessee had been 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 into 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. and it also ended up being further submitted that the newest house that is residential not be purchased by the assessee in his own name neither is it necessary so it should really be bought exclusively inside the title. It had been submitted that the assessee have not bought the house that is new the title of a stranger and whole investment has arrived out of the supply of the assessee and there is no contribution through the assessee’s spouse. The distribution of this assessee had been considered although not discovered acceptable towards 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 had been further held because of the AO that Smt. Nikita Jain, wife regarding the assessee, is having her PAN and filing her return of income that will be additionally evaluated to income tax, consequently, as per tax provisions, spouse and wife both could never be thought to be single entity as well as the advantageous asset of investment produced by a person assessee can’t be provided to another individual assessee. The AO further drawn mention of the the conditions of Section 54F for the Act and held that to claim deduction, the investment in brand new asset is within the name of assessee himself. It was further held by the AO that in lack of the private stability sheet for the assessee and lack of proper documentary evidence, it can not be ascertained whether assessee will not possess one or more domestic home, apart from brand new asset, in the date of transfer associated with initial asset. Properly, of these two reasons, the claim of this 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 purchase of an innovative new domestic household has become purchased by the assessee.
Nonetheless, it is really not particularly required beneath the legislation that your house must be bought into the name of assessee only. It had been further contended that liberal construction should really be directed at conditions of section 54F for the Act of course substantive requirement are fulfilled, advantage provided by the Parliament shouldn’t be removed for tiny and inconsistencies that are irrelevant. Further, the assessee put reliance from the decision of Honorable Delhi tall Court in the event of CIT vs. Kamal Wahal (351 ITR 4), wherein, in the context of section 54F for the Act and buy of home within the name of assessee’s spouse, it absolutely was held that the newest house that is residential not be bought by the assessee in the title neither is it necessary so it must be bought and solely inside the title. Further, reliance ended up being put on your decision of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) in which the homely household had been bought within the title associated with the assessee’s spouse, deduction under part 54 ended up being permitted. Further, reliance had been put on your choice of Hon’ble Andhra Pradesh tall Court in case of belated Gulam Ali Khan vs. CIT (165 ITR 228) wherein when you look at the context of part 54 for the Act, it had been held that your message ‘assessee’ should be offered a broad and interpretation that is liberal as to incorporate their appropriate heirs also. Further, reliance ended up being put 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 where in fact the consideration that is entire flown from her spouse, merely because either in the purchase deed or perhaps into the bond, her husband’s title can also be mentioned, the assessee is not denied the advantage of deduction u/s 54 and 54EC associated with Act. Further, reliance ended up being added to your choice of Honorable Delhi tall Court in the event of CIT vs. Ravinder Kumar Arora (342 ITR 38) wherein when you look at the context of section 54F for the Act, it absolutely was held that where in actuality the assessee has included the title of his spouse together with home happens to be bought jointly into the names, it can maybe maybe not make a difference additionally the conditions stipulated in section 54F stand fulfilled.
The ld. CIT(A) however relied regarding the choice of Honorable Rajasthan High Court in the event of Kalya vs. CIT (251 CTR 174) wherein when you look at the context of section 54B of the Act, it absolutely was held that the assessee wouldn’t 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 decision, it had been held that the word ‘assessee’ utilized in the IT Act has to be provided a ‘legal interpretation’ and not just a ‘liberal interpretation, since it would tantamount to providing a totally free hand towards the assessee along with his legal heirs and it also shall curtail the income regarding the national, that your legislation will not permit. Following 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 reference to the present choice of Hon’ble Rajasthan tall Court in case there is Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others dated 07.11.2017) wherein within the context of section 54B, it absolutely was held that in which the investment is manufactured into the title associated with spouse, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.
within the said situation, the assessee has sold agricultural land and bought another agricultural land within the title of their spouse and stated deduction u/s 54B of this Act. The Co-ordinate Bench vide its purchase in ITA No. 333/JP/2016 dated 26.12.2016 following a decision 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. The Hon’ble Rajasthan High Court https://russianbrides.us/asian-brides has framed the following substantial question of law in the context of said facts, on appeal by the assessee
“Where ld. ITAT had been 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 home eligible u/s 54B belonged into the appellant just and simply the subscribed document had been performed within the title o f the spouse and additional the wife hadn’t split income source.”
The Honorable Rajasthan tall Court, after considering its early in the day choice in the event of Kalya vs. CIT(supra) together with some other choices of Honorable Delhi tall Court, Honorable Madras High 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 that it’s the assessee who’s got to spend and it’s also perhaps not specified when you look at the legislation that the investment is usually to be into the title of this assessee and in which the investment is created when you look at the title of wife, the assessee will be entitled to deduction and it has hence determined the problem in preference of the assessee. The appropriate findings for the Honorable Rajasthan tall Court are contained at para 7.2 and 7.3 of the purchase that are reproduced as under:-
on the floor of investment produced by the assessee within the title of their spouse, in view regarding the decision of Delhi tall Court in Sunbeam car Ltd. along with other judgments of various High Courts, your message utilized is assessee has to spend, it is really not specified it is to stay the title o f assessee.