This is certainly an appeal filed because of the assessee resistant to the purchase 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 of this Act.
Quickly reported, the important points associated with situation are that throughout the 12 months in mind, the assessee has offered three agriculture lands belonging to him for a purchase consideration of Rs. 99,25,000. The assessee has bought another land that is agricultural a consideration of Rs. 32,00,000/- for which deduction u/s 54F has been claimed and exact same had been allowed because of the Assessing Officer and is perhaps 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 spouse, Smt. Nikita Jain, and claimed deduction u/s 54F for the Act and which is in dispute before us.
through the span of evaluation proceedings, the assessee had been expected showing cause as to the reasons the reported u/s 54F of this Act, 1961 might not be disallowed, due to the fact home was not owned into the name of assessee. In reaction, the assessee submitted that the consideration for such home had been given out of payment of advance belonging to the assessee received from Narvik Nirman & Financiars Pvt. Ltd. and it also ended up being further submitted that the newest residential household need not be bought because of the assessee inside the very own title neither is it necessary that it must be purchased solely in the name. It absolutely was submitted that the assessee has not yet purchased the house that is new the name of the 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 regarding the assessee was 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, spouse of this assessee. It had been further held by the AO that Smt. Nikita Jain, wife regarding the assessee, is having her PAN and filing her return of earnings which can be also examined to taxation, consequently, according to tax provisions, spouse and spouse both could never be thought to be solitary entity plus the advantage of investment created by a person assessee can’t be fond of another assessee that is individual. 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 title of assessee himself. It had been further held by the AO that in lack of the private stability sheet regarding the assessee and lack of appropriate documentary evidence, it can’t be ascertained whether assessee will not have one or more residential home, aside from brand brand new asset, in the date of transfer for the asset that is original. Consequently, for these two reasons, the claim for the assessee u/s 54F for the I.T.Act, 1961 ended up being disallowed.
Being aggrieved, the assessee carried the problem in appeal prior to the ld CIT(A) and presented that the purchase of an innovative new domestic household has become purchased because of the assessee.
Nonetheless, it’s not especially needed beneath the legislation that the home ought to be bought when you look at the title of assessee just. It had been further contended that liberal construction should always be provided to conditions of section 54F for the Act and when substantive requirement are satisfied, advantage issued by the Parliament shouldn’t be removed for tiny and inconsistencies that are irrelevant. Further, the assessee put reliance regarding the decision of Honorable Delhi tall Court in the event of CIT vs. Kamal Wahal (351 ITR 4), wherein, when you look at the context of section 54F for the Act and get of household within the name of assessee’s spouse, it absolutely was held that the newest house that is residential not be bought by the assessee inside the title neither is it necessary it should always be bought and exclusively in the title. Further, reliance had been positioned on your choice of Honorable Madras High Court in the event of CIT vs. V. Natarajan (287 ITR 271) in which the homely home ended up being purchased into the title for the assessee’s spouse, deduction under part 54 ended up being allowed. Further, reliance had been added to your choice of Hon’ble Andhra Pradesh tall Court in the event of Late Gulam Ali Khan vs. CIT (165 ITR 228) wherein when you look at the context of area 54 of this Act, it absolutely was held that the term ‘assessee’ must certanly be offered a broad and interpretation that is liberal as to incorporate their appropriate heirs additionally. Further, reliance was positioned on your choice of Honorable Karnataka High Court when you look at the full case of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it absolutely was held that where in actuality the whole consideration has flown from her spouse, simply because in a choice of the purchase deed or into the bond, her husband’s name can be mentioned, the assessee may not be rejected the advantage of deduction u/s 54 and 54EC regarding the Act. Further, reliance ended up being added to the decision of Honorable Delhi tall Court in the event 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 his spouse therefore the home happens to be bought jointly within the names, it could perhaps 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 High Court in case of Kalya vs. CIT (251 CTR 174) wherein into the context of section 54B for the Act, it had been held that the assessee wouldn’t be eligible to get exemption for land purchase by him within the true name of their son and daughter-in-law. Further when you look at the said decision, it absolutely was held that the word ‘assessee’ utilized in the IT Act has to be offered a ‘legal interpretation’ and not really 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 High Court in the event of Kalya, the ld. CIT(A) upheld the rejection of claim regarding 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 also 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 07.11.2017 that is dated wherein into the context of section 54B, it had been held that where in actuality the investment is created into the name of this spouse, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.
into the said situation, the assessee has sold agricultural land and bought another agricultural land into the name of his spouse and stated deduction u/s 54B of this Act. The Bench that is co-ordinate vide order 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 decided the problem contrary to the assessee and contains verified the denial of deduction u/s 54B of the Act. Within the context of said facts, on appeal because of the assessee, the Hon’ble Rajasthan tall Court has framed listed here significant concern of legislation:
“Where ld. ITAT was justified in disallowing the exemption u/s 54B o f the Act without appreciating that the funds used when it comes to investment to buy regarding the home eligible u/s 54B belonged into the appellant just and simply the subscribed document had been performed into the title o f the spouse and additional the spouse hadn’t split revenue stream.”
The Honorable Rajasthan tall Court, after considering its previous choice in the event of Kalya vs. CIT(supra) while the many other decisions of Honorable Delhi tall Court, Honorable Madras High Court, Honorable Karnataka tall Court, Honorable Punjab and sexybrides.org/asian-brides Haryana tall Court, and Honorable Andhra Pradesh tall Court, as additionally relied upon by the assessee, has held that it’s the assessee who has got to get and it’s also maybe not specified within the legislation that the investment is usually to be into the name associated with assessee and in which the investment is manufactured within the title of spouse, the assessee will probably be entitled to deduction and it has thus determined the situation in preference of the assessee. The appropriate findings associated with 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.