Mohd Amin Esmail Fazlani Vs ITO (ITAT Mumbai)
Material Facts: The assessee filed his return of income for Assessment Year 2013–14 declaring total income of Rs. 3,72,770. During assessment, the Assessing Officer assessed the total income at Rs. 59,21,730 after partially disallowing the deduction claimed under Section 54 of the Income-tax Act.
The assessee had sold a residential property resulting in long-term capital gains (LTCG) and invested the sale proceeds in acquiring a new residential property jointly with his wife. A total amount of Rs. 1,10,00,000 was invested in the new property. According to the assessee, his wife’s name was included as a joint owner for convenience, and part of the sale proceeds was transferred to her bank account through a gift before being utilised for the purchase. The assessee claimed exemption under Section 54 on the entire investment.
The Assessing Officer restricted the deduction to Rs. 55,00,000 on the ground that half of the new property belonged to the assessee’s wife. The Commissioner of Income Tax (Appeals) upheld the restriction.
Procedural History
The Assessing Officer partially disallowed the Section 54 claim and assessed the income accordingly. The Commissioner of Income Tax (Appeals) confirmed the disallowance. The assessee appealed before the Income Tax Appellate Tribunal, Mumbai.
