Exemption u/s 54 allowed if purchase amount paid by assessee irrespective of name on agreement of Son

Smt. Subbalakshmi Kurada Vs ACIT (ITAT Bangalore)

The issue under consideration is that if the assessee reinvested capital gains in purchase of new residential house in the name of assessee and his son together then whether assessee in entitle to the full amount of exemption u/s 54?

As per Section 54, it mandates that the new asset should be purchased by the Assessee and it does not stipulate that the house should be purchased in the name of the Assessee only.

ITAT have noticed that the entire consideration towards purchase of new residential house has flown from the bank account of the assessee. The Hon’ble Karnataka High Court has held in the case of Mrs. Jennifer Bhide that the deduction u/s 54 of the Act should not be denied merely because the name of assessee’s husband is mentioned in the purchase document, when the entire purchase consideration has flown from the assessee. Accordingly, following the decision rendered by Hon’ble Karnataka High Court in the case of Mrs. Jennifer Bhide (supra), ITAT hold that the assessee is entitled to full deduction u/s 54 of the Act. Accordingly, ITAT set aside the order passed by Ld CIT(A) on this issue and direct the AO to allow deduction u/s 54 of the Act as claimed by the assessee.

FULL TEXT OF THE ITAT JUDGEMENT

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