Kaushlendra Singh Vs ITO (ITAT Jaipur)
Facts- The assessee sold immovable property for sale consideration of Rs.14,75,000/- on 11/10/2010. The value of which evaluated at Rs.14,79,960/- by the Stamp Duty Authority. Out of sale consideration of Rs. 14,75,000/- the assessee made investment of Rs. 7,48,000/- in the purchase of new residential house property in the name of his wife namely, Smt. Garima Singh, within the prescribed time limit as prescribed under the provisions of section 54F of the Act. Accordingly, the assessee claimed exemption u/s 54F of the Income tax Act. Consequently, no capital gain was chargeable under the head Long term capital gain on sale of above immovable property. Despite these facts, the AO while completing assessment u/s 143(3)/147 of the Act on 08/12/2018 disallowed the exemption claimed u/s 54F of the Act at Rs. 6,33,190/- and added the same to the total income of the assessee as long-term capital gain, holding/observing that since the assessee made investment in immovable property in the name of his wife and the assessee and his wife are different persons as well as separate assessee the deduction claimed u/s 54F of the Act, is not allowable to the assessee.
The AO arrived the findings as held that the assessee did not file her return of income voluntary as per provision of section 139 of the IT Act, 1961 besides having taxable income for A.Y. 2011-12, therefore, penalty proceedings u/s 271F of the Income Tax Act, 1961 is hereby initiated.
Being aggrieved by the assessment order, the assessee preferred an appeal before the ld. CIT(A) and later on before ITAT.
Conclusion- We observed that the exemption was claimed U/s 54F of the Act on this account is Rs. 6,33,190/-. It is further noticed that the Assessing Officer has not disputed the purchase of new house in the name of wife of the assessee though the claim was denied by the AO. Therefore, the claim of deduction U/s 54F of the Act cannot be denied merely on the ground that the new residential house was purchased in the name of his wife when the investment made by the assessee from the sale proceeds of the existing asset and yielded capital gain from the said transactions.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal by the assessee is directed against the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi [hereinafter referred to as (NFAC)] dated 25.08.2021 for the AY 2011-12.
2. The assessee has raised the following grounds:-
“1. On the facts and in the circumstances of the case the learned CIT(Appeals), National faceless Appeal Centre, grossly erred in confirming the addition of Rs. 6,33,190/- made by the AO on account of long term capital gain, arose on sale of immovable property, situated at Plot No. C-174, RICCO, Housing Colony, Sitapura, Jaipur and consequently erred in sustaining the order of the Assessing Officer passed u/s 143(3) 147 of the Act, merely on the technical ground that the investment was made by the appellant in the purchase of new residential house property, in the name of his wife Smt. Garima Singh who herself is a separate assessee and having separate source of income; and thus denied the benefit of section 54F of the Income-tax Act, 1961.
2. On the facts and in the circumstances of the case the learned CIT(Appeals), National faceless Appeal Centre, grossly erred in not properly appreciating the decisions of Hon’ble Rajasthan High Court in the case of Shri Laxmi Narayan vs. Commissioner of Income-tax, Jaipur -D.B. Income Tax Appeal No. 20/2016-2017-LL-1107-17/ and Mahadev Balai vs. ITO Ward-7(2) Jaipur-D.B. Income-tax Appeal no. 136/2017 dated 07/11/2017, and thereby holding that these decisions were of no help to the appellant for the reason that in these cases the wife was having no separate source of income.
3. On the facts and in the circumstances of the case the learned CIT(Appeals), National faceless Appeal Centre, was not correct in construing the provisions of section 54F and holding that the investment out of the sale proceeds of the old property required to be made in the name of assessee himself and not otherwise, despite numerous decisions of Hon’ble High Courts wherein it has been held that the intent and purpose with which the section was enacted by the parliament had to be considered and the interpretation which is not in consonance with the provisions should be avoided.
4. The appellant craves the right to add, alter or amend any of the grounds of appeal before the date of hearing.”
3. Brief facts of the case are that the assessee sold immovable property situated at Plot no. C-174, RICCO Housing Colony, Sitapura, Jaipur for sale consideration of Rs.14,75,000/- on 11/10/2010. The value of which evaluated at Rs.14,79,960/- by the Stamp Duty Authority. Out of sale consideration of Rs. 14,75,000/- the assessee made investment of Rs. 7,48,000/- in the purchase of new residential house property in the name of his wife namely, Smt. Garima Singh, within the prescribed time limit as prescribed under the provisions of section 54F of the Act. Accordingly, the assessee claimed exemption u/s 54F of the Income tax Act. Consequently, no capital gain was chargeable under the head Long term capital gain on sale of above immovable property. Despite these facts, the AO while completing assessment u/s 143(3)/147 of the Act on 08/12/2018 disallowed the exemption claimed u/s 54F of the Act at Rs. 6,33,190/- and added the same to the total income of the assessee as long-term capital gain, holding/observing that since the assessee made investment in immovable property in the name of his wife and the assessee and his wife are different persons as well as separate assessee the deduction claimed u/s 54F of the Act, is not allowable to the assessee.
4. The AO arrived the findings as held that the assessee did not file her return of income voluntary as per provision of section 139 of the IT Act, 1961 besides having taxable income for A.Y. 2011-12, therefore, penalty proceedings u/s 271F of the Income Tax Act, 1961 is hereby initiated. Subject to above, total income is computed as under:-
