Case Law Details
Shri Vivek Jain Vs. DCIT (ITAT Jaipur)
Through the span of evaluation procedures, the assessee had been expected to demonstrate cause as to the reasons the reported u/s 54F of this Act, 1961 might not be disallowed, since the home was not owned within the title of assessee. In reaction, the assessee presented that the consideration for such home ended up being given out of payment 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 in their very own title neither is it necessary so it must be purchased solely in their title.
It had been submitted that the assessee has not yet bought the brand new home in the title of a complete stranger and whole investment has arrived from the way to obtain the assessee and there clearly was no contribution through the assessee’s wife. The distribution for the assessee had been considered however discovered acceptable towards the Assessing Officer. According to Assessing Officer, the property that was offered ended up being of the assessee whereas the reinvestment in home (domestic household) happens to be manufactured in the title of Smt. Nikita Jain, spouse of this 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 additionally evaluated to taxation, consequently, depending on tax conditions, spouse and wife both could never be thought to be solitary entity as well as the advantageous asset of investment created by a person assessee may not be fond of another specific assessee.
The AO reference that is further drawn the conditions of Section 54F associated with Act and held that to claim deduction, the investment in brand brand new asset should really be when you look at the title of assessee himself. It was further held by the AO that in lack of the private balance sheet of this assessee and lack of proper documentary evidence, it can not be ascertained whether assessee will not possess one or more domestic household, except that brand new asset, regarding the date of transfer for the asset that is original. Consequently, for those two reasons, the claim regarding the assessee u/s 54F for the I.T.Act, 1961 had been disallowed.
Contention of Appellant
Assessee contends that buy of a fresh house that is residential become bought because of the assessee. Nevertheless, it’s not particularly needed underneath the legislation that your house ought to be bought within the title of assessee just. It had been further contended that liberal construction should really be fond of conditions of section 54F for the Act of course substantive requirement are satisfied, advantage issued by the Parliament shouldn’t be recinded for tiny 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 for the Act and get of utile link home into the name of assessee’s spouse, it had been held that the newest residential household need not be bought because of the assessee in the title nor is it necessary it should really be bought and solely inside the title.
Further, reliance had been added to your choice of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in actuality the homely household had been bought within the title associated with the assessee’s spouse, deduction under area 54 had been permitted.
Further, reliance ended up being added to 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 phrase ‘assessee’ must certanly be offered 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 full instance of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it had been held that where in fact the whole consideration has flown from her spouse, simply because in a choice of the purchase deed or perhaps within the bond, her husband’s title can also be mentioned, the assessee may not be rejected the main benefit of deduction u/s 54 and 54EC regarding the Act.
Further, reliance had been 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 had been held that where in fact the assessee has included the title of their spouse while the home happens to be bought jointly within the names, it could perhaps not make any difference plus 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 dated 07.11.2017) wherein into the context of section 54B, it absolutely was held that where in fact the investment is created into the name associated with spouse, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.
In light of appropriate proposition so laid straight down by the Honorable Rajasthan High Court in the event of Mahadev Balai (supra), in which the investment into the brand new home home has flown through the assessee, which can be maybe not in dispute into the instant instance, just given that the latest domestic home home happens to be bought because of the assessee within the title of his spouse, exactly the same can not be basis when it comes to denial of deduction stated u/s 54F of the Act.