Case Law Details
The assessee was owner of the property standing in his name which was sold; qua capital gain exemption u/s 54f was claimed by the assessee as the sale proceeds of the property were utilized for purchasing another house in the name of assessee and his wife. Wife did not contribute any amount towards purchase. Thus new house was purchased by the assessee. The entire purchase amount was sourced by the assessee from the sale of house property. Rental income from the sold property was earlier offered in the hands of the assessee. Assessing Officer was of the view that exemption u/s 54 was allowable to assessee to the extent of one half of the purchase amount as one half belonged to wife. CIT(A) on the basis of evidence, remand report, facts and circumstances held that sec. 54 is applicable when the assessee has utilized the entire proceeds of its property in the purchase of a new house which is complied with. Reliance was placed on Hon’ble Madras High Court judgment in the case of CIT Vs. V. Natarajan 287 ITR 271 holding that even if the new house is purchased by the assessee in the name of his wife within a period of one year of receiving the sale proceeds, the exemption u/s 54 was eligible.
Delhi High Court judgment in the case of CIT Vs. Ravinder Kumar Arora 342 ITR 38 (Del.), held as under:
“On the aforesaid facts, we are of the view that the conditions stipulated in Section 54F stand fulfilled. It would be treated as the property purchased by the assessee in his name and merely because he has included the name of his wife and the property purchased in the joint names would not make any difference. Such a conduct has to be, rather, encouraged which gives empowerment to women. There are various schemes floated by the Government itself permitting joint ownership with wife. If the view of the Assessing Officer (AO) or the contention of the Revenue is accepted, it would be a derogatory step.”
Respectfully following the Hon’ble Delhi High Court judgment in the case of Ravinder Kumar Arora (supra), which in turn follows Hon’ble Madras High Court judgment in the case of V. Natarajan (supra), and Hon’ble Andhra Pradesh High Court judgment in the case of Mir Gulam Ali Khan Vs. CIT 165 ITR 228, we uphold the order of CIT(A) on this issue also.
INCOME TAX APPELLATE TRIBUNAL, DELHI
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