Satya Prasan Rajguru Vs DCIT (ITAT Delhi)
ITAT Delhi held that gift of a property to wife specially when she is a co-sharer in the property cannot be considered to be a colourable device and camouflage transaction to taint claim of Section 54F of the Income Tax Act. Accordingly, deduction u/s. 54F erroneously disallowed.
Facts- The assessee has filed return of income on 31.12.2021 which was subsequently revised on 31.03.2022 declaring total income of Rs.194,39,080/- and claimed deduction u/s 54F of the Act to the tune of Rs.9,65,05,033/-. Statutory notices were issued and AO examined the claim of deduction u/s 54F of the Act, with regard to eligibility and concluded that as on the date of transfer of capital asset, shares of unlisted companies, assessee was in possession/occupation of more than one residential house, thus the assessee is not eligible for deduction u/s 54F of the Act.
Conclusion- Held that gift of a property to wife specially when she is a co-sharer in the property cannot be considered to be a colourable device and camouflage transaction to taint claim of Section 54F. At the same time the co-ownership of the two properties itself makes it doubtful that same can be considered to be an embargo for claim of benefit of Section 54F of the Act. Thus, this discussion leads us to a conclusion that ld. tax authorities below have fallen in error to consider assessee not eligible for exemption u/s 54F of the Act for owning more than one residential house other than the ‘new asset’ on the date of transfer of original asset.
