Case Law Details
Goulikar Jawaharlal Vs ITO (ITAT Hyderabad)
The issue under consideration is whether the default in home loan by the owner of the property can be the reason to disallow the capital gain deduction u/s 54F of the Income Tax Act, 1961?
ITAT states that, it is apparent that the sale proceeds received by the assessee was utilised for purchase of the new residential property in the name of his son. The new asset is also purchased within the due date of filing of the return by the assessee. Therefore, as pointed out by the Ld. AR the assessee was not bound to deposit the sale proceeds in the capital gain scheme account. Further the bank loan obtained by the assessee’s son from the HDFC Bank does not appear to be the source for the purchase of the new residential house by the assessee’s son. Violations made by the assessee’s son with respect to the terms of loan agreement entered with HDFC Bank towards the purchase of the residential house is of no relevance as far as the Income Tax Act is concerned for granting deduction U/s. 54 of the Act. Penal action against such violation if any has to be initiated by the Bank, as per the Banking Regulations Act or as per the terms of the agreement between them and not by the Revenue. Moreover, the case decided by the Hon’ble Delhi High Court cited supra has also held that “wherein the assessee purchases new house in the name of his wife and not in the name of any stranger who was unconnected with him, exemption cannot be denied if entire investment had come out of proceeds of old property”. From the above it is clear that the assessee has not violated any of the provisions mentioned in section 54F of the Act in order to be denied for the benefit of deduction. Therefore, ITAT hereby set aside the order of the Ld CIT (A) on the issue and direct the Ld. AO to grant the benefit of deduction U/s.54F of the Act to the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is filed by the assessee aggrieved by the order of the Ld. CIT(A) in ITA No.0065/CIT(A)-3/15-16, dated 4/6/2016 passed U/s. 250(6) r.w.s. 143(3) of the Act for the AY 2012-13.
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