TMI Blog2020 (7) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... e and secondly, the assessee has failed to substantiate the cost of construction. As far as investment made in the name of the assessee s wife is concerned, we find that the issue is covered in favour of the assessee by decision of the Hon ble Rajasthan High Court in case of Shri Mahadev Balai vs ITO [ 2017 (1) TMI 183 - ITAT JAIPUR]. The ratio of the aforesaid decision though rendered in the context of section 54F of the Act, given the similarity of language employed, will equally apply in the instant case in context of section 54. Further, the decision of Hon ble Madras High Court in case of CIT vs. Natarajan [ 2006 (2) TMI 136 - MADRAS HIGH COURT] rendered in context of section 54 supports the case of the assessee. Therefore, mere fact that the investment has been made in the name of the wife cannot be a reason for disallowance of deduction under section 54. Regarding the cost of the construction, the same is supported by the valuation report where the valuer has determined the cost of construction at ₹ 250481/-. Assessee is eligible for claim of deduction under section 54 - Appeal of the assessee is allowed. Levy of penalty u/s 271(1)(c) - HELD THAT:- As d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, the deduction claimed u/s 54 amounting to ₹ 8,37,280/- was denied by the Assessing Officer. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the action of the Assessing Officer. Against the said findings, the assessee is in appeal before us. 4. During the course of hearing, the ld. AR submitted that the assessee has purchased the plot of land for ₹ 7,16,638/- in the name of his wife and such investment was made out of the sale proceeds from sale of the original house property. In support, the reliance was placed on the Coordinate Bench decision in case of Shri Vivek Jain, Jaipur vs. DCIT, Circle-07, Jaipur (in ITA No. 139/JP/2016 dated 08.12.2017) and following other decisions:- Mir Gulam Ali Khan vs. CIT 165 ITR 0228 (AP) CIT vs. Natarajan (2006) 203 CTR 0037 (Mad) CIT vs. Kamal Wahal [2013] 351 ITR 4 (Delhi) CIT vs. Ravinder Kumar Arora [2012] 342 ITR 38 (Delhi) DIT vs. Jennifer Bhide [2012] 349 ITR 80 (Kar) 5. It was further submitted by the ld AR that the assessee constructed a small residential house on the aforesaid land and incurred an amount of ₹ 2,50,000/- on its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain: 8. On reading of the aforesaid provisions, in order to claim the deduction what is required to be satisfied by the assessee is that firstly, there should be a transfer of a long term capital asset, being a residential house. In the instant case, the assessee has sold a residential house on 29.11.2007 and the same is thus not under dispute. Secondly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54B belonged to the appellant only and merely the registered document was executed in the name of the wife and further the wife had not separate source of income. 11. The Hon ble Rajasthan High Court, after considering its earlier decision in case of Kalya vs. CIT(supra) and the various other decisions of Hon ble Delhi High Court, Hon ble Madras High Court, Hon ble Karnataka High Court, Hon ble Punjab and Haryana High Court, and Hon ble Andhra Pradesh High Court, as also relied upon by the assessee, has held that it is the assessee who has to invest and it is not specified in the legislation that the investment is to be in the name of the assessee and where the investment is made in the name of wife, the assessee shall be eligible for deduction and has thus decided the matter in favour of the assessee. The relevant findings of the Hon ble Rajasthan High Court are contained at para 7.2 and 7.3 of its order which are reproduced as under:- 7.2 On the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Auto Ltd. and other judgments of different High Courts, the word used is assessee has to invest, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer has levied the penalty on account of denial of deduction claimed by the assessee u/s 54 of the Act. In view of our decision in ITA No. 1390/JP/2018 wherein we have directed to allow the claim of deduction u/s 54, the penalty u/s 271(1)(c) of the Act, being consequential in nature, is hereby directed to be deleted. 16. In the result, the appeal of the assessee is allowed. ITA No. 1392/JP/2018 17. In this appeal, the the assessee has challenged the levy of penalty u/s 271F of the Act. 18. In this regard, the ld. AR submitted that the assessee was under the belief that since his income during the previous year did not exceed the maximum amount which is chargeable to income tax, he was not required to file the return of income for the impugned assessment year and he accordingly didn t file his return of income and the penalty so levied may be directed to be deleted. In support, the reliance was placed on the following decisions: Government of India vs. Citadel Fine Pharmaceutical and Ors., 184 ITR 447 Noble Pictures vs. JCIT, 90 ITD 248 (Cochin) 19. The ld DR drawn our reference to the provisions of section 139 and submitted that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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