9911796707
TMI Blog2014 (1) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome for the assessment year 2005-06 disclosing an income of Rs.2,00,260. The assessment was reopened and during the re-assessment proceedings, Assessing Officer noticed that the assessee sold house property of which he was a co-owner having 20% share. The total proceeds realised on the property was Rs.1,67,44,140 and during the assessment year 2004-05, the assessee along with other co-owners purchased a house property in Road No.12 Banjara Hills, Hyderabad and claimed exemption of Rs.31,41,007 under S.54 of the Income-tax Act. The assessee's share in the property worked out to Rs.32,50,000. Subsequently, the property which was purchased at Road No.12 Banjara Hills was sold and the assessee along with other co-owners purchased property at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot get deduction under S.54 in respect of property purchased by his sister-in-law and nephew and accordingly confirmed the order of the Assessing Officer. 3. Aggrieved, assessee is in appeal before us. 4. Assessee raised the following grounds in this appeal- 1. The learned CIT(A)-II erred in facts and law while passing the order u/s. 143(3) r.w.s. 147. 2. The learned CIT(A)-II erred in not considering the rule of purposive construction and erred in interpreting the provisions of Section 54F, this section does not require that the new residential property shall be purchased in the name of the assessee only. It merely says that the assessee should have purchased/constructed a residential house. 3. The learned CIT(A)-II erred in conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower authorities and other material on record. The provisions of S.54 read as follows- "54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then], instead of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub- section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme71 which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayur Dharod. It has been claimed that since Smt. Neena Dharod, sister-in-law and Shri Mayur Dharod, Nephew of the assessee are blood relations, assessee is eligible for deduction under S.54F, in respect of the investment made on the purchase of the said property at Road No.45, Banjara Hills. To repeat, the assessee, who is a co-owner of the property sold the property on 28.5.2003 and has purchased property at Road No.12, Bajnjara Hills on 28.2.2004 and the said property was sold again on 30.11.2004, and thereafter there was no purchase of property by the assessee, but the property has been purchased by his sister in law and nephew. 8. In the factual back ground noted above, circumstances, the short question that arises for consideration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide (supra), the Bangalore Bench of the Tribunal has referred to the decision of the Hon'ble Madras High Court in the case of CIT V/s. V.Natarajan (287 ITR 271), where husband has sold the residential property and purchased residential property within the stipulated period in his wife's name. Considering the factual background in that case, the Madras High Court held that benefit of S.54F is available to the assessee. In this case, the grievance before the Tribunal was that the learned CIT(A) erred in law and on facts in restricting the exemption under S.54, being 50% of total investment, just because the deed is registered in joint names, ignoring the fact that the investment in the new property was made solely out of the assessee's own fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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