Dilip B. Mundada Vs DCIT (ITAT Pune)
Jurisdictional High Court and other Hon’ble High Courts and ITAT Pune have held that for availing the benefit of deduction u/s 54F the new asset shall be purchased in the name of the assessee. Applying the said proposition of law to the present case, we hold that the Flat No. 401 is not in the name of the assessee, hence it is not eligible for exemption u/s 54F of the Act.
The assessee claimed that the amount for Flat No. 401 was invested by him. However, it is factually incorrect. It is observed from the documents filed in the paper book that the payments for Flat No.401 were made by Mrs. Uma Mundada. The details of payments are as under :
> Rs. 1,25,000/- own fund of Mrs.Uma Mundada, initial payment to builder.
> Rs.3,75,000/- borrowed from partnership firm Ridkaran Bansilal Mundata by Mrs. Uma to pay to builder for flat no.401
> Rs. 5,00,000/- loan taken from Sangita by Mrs Uma for the flat. > Rs.2,00,000/- loan taken by Mrs. Uma from the partnership firm . > Loan of Rs.5,00,000/- from lunkad reality by Mrs.Uma
> Remaining Home Loan from ICICI Bank in joint name of Dilip Mundada and Mrs.Uma Mundada.
> The Home loan is in join name because the bank normally ask for joint name to secure the repayment. Therefore, though the Flat No. 402 which is in the name of Dilip Mundada also have home loan in joint name with Mrs.Uma Mundada.
Thus the payments were also made by Mrs. Uma Mundada.
However, as discussed in the earlier paras the new house should have been purchased by the assessee. The section 54F does not say that the assessee shall invest in the new house but it says the assessee shall purchase new house. Therefore, even on this ground the rejection of claim of section 54F for the Flat No. 401 is justified. Therefore, we hold that the Assessing officer has rightly restricted assessee’s claim for deduction u/s 54F for Flat No. 402 only.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income-tax(Appeals)-8, Pune’s, order dated 24.09.2019 for the Assessment Year 2013-14. The appellant Assessee has raised the following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law the Lower Authorities has erred not granting the exemption u/s 54F under Income Tax Act, 1961 for Rs.24,69,227/-without appreciating the fact that your appellant has purchased two adjacent flats which were used as a single unit and therefore appellant is entitled for exemption as claimed. We pray accordingly.
The appellant craves for to leave, add, alter, modify, delete above ground of appeal before or at the time hearing, in the interest of natural justice.”
2. Brief facts of the case are that during the year under consideration the assessee Dilip B.Mundada sold a property on 30.03.2013 for Rs.1,51,00,000/-. The assessee claimed to have purchased two flats as under :
