Brief facts of the case are that the assessee sold immovable property situated at Jaipur for sale consideration of Rs.14,75,000/- on 11/10/2010. The value of which was evaluated at Rs.14,79,960/- by the Stamp Duty Authority. Out of sale consideration of Rs. 14,75,000/- the assessee made an investment of Rs. 7,48,000/- in the purchase of new residential house property in the name of his wife name, within the prescribed time limit as prescribed under the provisions of section 54F of the Act.
Accordingly, the assessee claimed exemption u/s 54F of the Income-tax Act. Consequently, no capital gain was chargeable under the head Long-term capital gain on the sale of the above immovable property. Despite these facts, the Assessing Officer (AO) while completing assessment u/s 143(3)/147 of the Act on 08/12/2018 disallowed the exemption claimed u/s 54F of the Act at Rs. 6,33,190/- and added the same to the total income of the assessee as long-term capital gain, holding/observing that since the assessee made an investment in immovable property in the name of his wife and the assessee and his wife are different persons as well as separate assessee the deduction claimed u/s 54F of the Act, is not allowable to the assessee.
Being aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income Tax (CIT). The Commissioner of Income Tax (CIT) rejected the arguments and submissions made by the assessee.
The Income Tax Appellate Tribunal (ITAT), Jaipur bench consisting of DR. S. Seethalakshmi, Judicial Member, and Rathod Kamlesh Jayantbhai, Accountant Member after hearing both the parties, perusing materials available on record held that the assessees claim of exemption U/s 54F of the Act against the investment of new residential house in the name of his wife is justifiable.
Tribunal held that “the claim of deduction U/s 54F of the Act cannot be denied merely on the ground that the new residential house was purchased in the name of his wife when the investment made by the assessee from the sale proceeds of the existing asset and yielded capital gain from the said transactions.”
Kaushlendra Singh vs ITO
ITA. No. 191/JP/2021
Decision in favour of: AssesseeIN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR