TMI Blog2017 (1) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... name of assessee’s wife and daughter in law the deduction as claimed by the assessee under section 54F is to be allowed. - Decided in favour of assessee - ITA No.7280/M/2013 - - - Dated:- 11-11-2016 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER For The Assessee : Shri Vimal Punmiya, A.R. For The Revenue : Shri, Rajesh Ojha, D.R. ORDER Per C.N. Prasad, Judicial Member: This appeal is filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)]-27, Mumbai dated 17.09.2013 for the assessment year 2009-10. The Revenue has raised the following grounds: 1. Whether on the facts and circumstances of the case and in law the Learned CIT(A)erred in concluding that flat No.2301-A in Lokhandwala Residency Tower Worli which is rented out as per leave Licence Agreement and 1/2 share in the f lat No.2401-A in Lokhandwala Residency Tower , Worli which is SOP, be treated as one unit by way of single agreement, for the purpose of Sec-54F? 2. Whether on the facts and circumstances of the case and in law the Learned CIT(A) had erred in concluding that even if the new asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout appreciating the submissions. 4. Assessee carried the matter to the Ld. CIT(A) and the Ld. CIT(A), considering the elaborate submissions made by the assessee, the evidences produced by the assessee before the Assessing Officer and before him and the averments of the Assessing Officer, held that the property situated in flat Nos.2301A and 2401A should be considered as a single unit as this property (duplex flat) was purchased by a single agreement, there is a single entrance with 4 bed rooms and single kitchen, therefore should be considered as a single unit in view of the special bench decision of the Mumbai, ITAT in the case of ITO vs. Sushila M. Jhaveri (107 ITD 327). Thus the Ld. CIT(A) accepted the contention of the assessee that the duplex flat is a single house owned by the assessee on the date of transfer of original asset and deduction under section 54F of the Act is allowable. The Ld. CIT(A) also held that in view of various decisions the deduction under section 54F cannot be denied for the reason that the property is registered in the name of assessee s wife and daughter in law when the entire sale consideration was paid by the assessee only. Against this order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hyderabad Bench in the case of N. Revathi vs. ITO (45 taxmann.com 30) the Ld. Counsel submits that a residential house does not mean a single residential house even where the assessee constructs or receives a number of flats adjacent to each other or in different floors of the same building then also the assessee would be entitled for deduction under section 54F of the Act. 7. In respect of the ownership of the property purchased the Ld. Counsel submits that the property was purchased in the name of Mrs. Alka Choksi (wife) and Neha Choksi (daughter in law). He submits that in assessee s caste/community it is considered auspicious to purchase property in the name of the female members of the family as they are considered as laxmi . He further submits that wife and daughter in law of the assessee have executed an affidavit wherein they have affirmed that entire sale consideration for the purchase of the property is paid by the assessee himself and they have no right, title and interest and possession in this property and that the property belongs to assessee. The Ld. Counsel for the assessee submits that investment was shown in assessee s books of account, entire purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et need not be registered in assessee s name for the purpose of allowing deduction under section 54/54F of the Act observing as under: 2.4.4 The Ld. AO on the bas is of document submi tted found that the appellant had not invested the entire amount from his account for the purchase of the new asset . Fur ther , he also found that as per the balance sheet and leave and license agreement presented before him, the appellant owned two properties viz, 1/2 share in Flat No.2401-A, Lokhandwala Residency Tower, Worli which was claimed as self occupied property and secondly Flat No. 2301-A, Lokhandwala Residency Tower , Wor l i which was let out as per leave and l icense agreement dated 07-01-2008. Thus, the Ld. AO came to the conclusion that the appellant has been owning two properties as on the date of sale of original asset and hence, he was not eligible for claiming deduction u/s. 54F. 2.4.5 During the course of appellate proceedings, the Ld. AR has filed detailed reasoning in support of the appellants claim. It has been stated that the appellant has purchased a residential property at Udaipur jointly in the name of his wife with his daughter-in-law and the entire consideration w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FDR. (Refer No. 65-66). After funds come in HDFC bank account purchase consideration of Udaipur property was paid. 2.4.8 In this regard, Ld. AR has placed reliance on the decision of Hon'ble Mumbai Bench of ITAT in the case of Bombay Housing Corporat ion Vs. CIT, 81 lTD 545 , that even if the assessee borrowed the required funds and satisf ied the condi t ions relat ing to investment in speci f ied assets, he should be ent i t led to exemption. 2.4.9 In the case of JCIT Vs. Smt . Armeda K. Bha ya, 95 lTD 313 (Mum) , Hon'ble Mumbai Bench of ITAT held that the new asset in the name of the assessee jointly with his mother and father was sufficient compliance for availing exemption u/s. 54F. 2.4.10 Simi lar ly, in the case of CIT Vs. V.Natarajan (2006) 154 Taxmann 399 (Mad), it has been held by the Hon'ble High Court that the purchase of house in the name of wife without even including the assessees name in the t itle deed will not deny the benefit of exemption u/s. 54F. 2.4.11 In the case of Ravinder Kaur Arora Vs. CIT (2012) 21 Taxmann.com 305 (Del), i t has been held that if the new house was bought in the name of the spouse, the assessee could claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the utilization of the monies by the appellant in the above manner amounted to utilization of the funds for the purpose of the construction his own residential house. Hence, the claim of the appellant for deduction under section 54F to the extent to which there was a reinvestment in the new residential house fulfilling the other conditions of section 54F, was to be upheld. 2.4.14 In view of the above, I am of the considered opinion that even if the new asset was purchased in the joint name of the appellant's wife and daughter-inlaw, the first condition regarding purchase I construction of a new asset is fulfilled. Secondly, keeping in view the Special Bench decision of Hon'ble Mumbai Bench of TAT in the case of Sushila Jhaver (supra) which is binding on the appellate authorities in Mumbai, in the facts of the case where the appellant has purchased a duplex unit by way of a single agreement, the second limb of section 54F is also fulfilled as the appellant would be owning just one house property and not two house properties though lying at two different floors interconnected by a staircase. 2,4 .15 In view of the same, appel lant ' s c l aim for deduc t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d namely to encourage construction of houses, we are convinced that the utilization of the funds in constructing a residential house should be treated as sufficient compliance of section 54 and therefore, hold that the appellant is entitled to the exemption u/s. 54 even in respect of the amount 'invested by way of construction of the residential house amounting to ₹ 16,40,311/-. Before we depart, we may mention that the Supreme court in Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh (1979) 118 ITR 326 has observed as follows: that there is no presumption that every person knows the law, It is often said that every one is presumed to know the law, but that is not a correct statement, there is no such maxim known to the law. 6. Therefore, by respectfully following the above decision, we allow this claim of the assessee. 10. We further notice that the proposition of the decision of Special Bench in the case of Sushila M Jhaveri (supra) has been approved in the case of CIT vs. Raman Kumar Suri by the jurisdictional High Court (29 Taxmann.com 231) wherein it was held as under: (d) We find no fault with the order of the Tribunal which h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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