Case Law Details
Mukkamala Srihari Rao Vs ACIT (ITAT Ranchi)
Whether the sale consideration received by a person from sale of capital asset if applied in the name of his wife or son for purchasing/constructing residential house whether the assessee can claim deduction u/s. 54F or 54 of the Act?.
From going through the decision(s) relied on by the ld. Counsel for the assessee in the case of in the case of Bhagwan Swroop Pathak (supra), we find that similar issue was for consideration regarding the deduction u/s. 54F of the Act for the investments made in purchase of property in the name of assessee’s son. The Coordinate Bench, Delhi relied on the judgment of the Hon’ble Delhi High Court in the case of CIT Vs. Kamal Vahal 351 ITR 4, wherein the assessee purchased new house in the name of his wife and the Hon’ble High Court held that deduction u/s. 54 is valid. Respectfully following the same the Delhi Tribunal decided in favour of assessee and allowed the deduction u/s. 54F of the Act claimed for purchase of property in the name of assessee’s son.
Similar view was also taken by the Tribunal (ITAT Ranchi) in the case of Anand Dhanuka (supra), wherein assessee invested the corresponding long term capital gain in name of his wife. This Tribunal in view of the judgment of the Hon’ble Apex Court in the case of CIT Vs. Vegetable Products Ltd (1973) 88 ITR 192(SC) followed the judgment of the Hon’ble Delhi High Court in the case of CIT Vs. Kamal Wahal (2013) 258 CTR 251 (Del) and decided in favour of assessee.
ITAT, therefore, respectfully following the judicial precedence referred hereinabove (supra) are of the considered view that since in the instant case the assessee has applied the sale consideration received from sale of capital asset towards purchase of residential flat in the name of his wife and son, the assessee is eligible to claim deduction u/s. 54F of the Act subject to fulfilment of all other conditions provided u/s. 54F of the Act. We, thus, reverse the finding of the ld. CIT(A) and allow ground no.1 raised by the assssee and direct the ld.AO to allow the benefit of deduction u/s. 54F of the Act at Rs. 89,45,000/- for two flats purchased in the name of assessee’s wife and son.
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