2013 (1) TMI 401 - DELHI HIGH COURT

Deduction u/s 54F - disallowance as residential house purchased in the name of his wife - assessee inherited 50% share in a residential house from his father - both the brothers jointly sold the property - sale proceeds invested in the acquisition of a vacant plot for Rs.31,25,100/- and the purchase of a residential house for Rs.34,35,700/- in the name of his wife - Held that:- Following the decision of CIT Vs. V. Natarajan [2006 (2) TMI 136 - MADRAS HIGH COURT], Late Gulam Ali Khan Vs. CIT [1984 (12) TMI 9 - ANDHRA PRADESH HIGH COURT] adopting the rule laid down in CIT Vs. Vegetable Products Ltd [1973 (1) TMI 1 - SUPREME COURT ] which says that if a statutory provision is capable of more than one view, then the view which favours the tax payer should be preferred. Also that Section 54F being a beneficial provision enacted for encouraging investment in residential houses should be liberally interpreted.

The entire purchase consideration was paid only by the assessee and not a single penny was contributed by the assessee’s wife. As a matter of fact, Section 54F in terms does not require that the new residential property shall be purchased in the name of the assessee; it merely says that the assessee should have purchased/constructed “a residential house”. See CIT Vs. Gurnam Singh [2008 (4) TMI 28 - PUNJAB AND HARYANA HIGH COURT] - in favour of the assessee.