Case Law Details
Kanaiyalal Muljibhai Patel Vs ITO (ITAT Ahmedabad)
The issue before us is, whether the house constructed by the assessee on a plot purchased in the name of HUF, exemption under section 54F, is available to the assessee or not ? The Revenue is of the opinion that for claiming exemption under section 54F, the investment ought to have been made in the assessee’s individual name and not in the name of HUF, because, HUF is a separate taxable entity. On the other hand, stand of the assessee is that new house has been constructed on a plot purchased in the name of HUF, but members of the HUF have not contributed any money, rather whole investment was made from the sale proceeds of earlier capital asset/land as well as contribution made by the assessee only, and therefore, it fulfilled all the requisite conditions. It was contended before us, that this aspect has been considered by the Hon’ble Delhi High Court and Karnataka High Court as well as ITAT, Ahmedabad Bench, wherein the Hon’ble High Courts and Tribunal concurred unanimously that it is not necessary to purchase new house only in the name of individual, and if other family members has also been made as co-owners, then also exemption under section 54F could be claimed.
In the case of CIT Vs. Kamal Wahal, 351 ITR 04 (Del), Hon’ble Delhi High Court has held that
“9……….For the purposes of Section 54F, the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. It is moreover to be noted that the assessee in the present case has not purchased the new house in the name of a stranger or somebody who is unconnected with him. He has purchased it only in the name of his wife. There is also no dispute that the entire investment has come out of the sale proceeds and that there was no contribution from the assessee’s wife.
10. Having regard to the rule of purposive construction and the object which Section 54F seeks to achieve and respectfully agreeing with the judgment of this Court, we answer the substantial question of law framed by us in the affirmative, in favour of the assessee and against the revenue. :
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