TMI Blog2017 (1) TMI 1762X X X X Extracts X X X X X X X X Extracts X X X X ..... by: Sh. T A Khan ORDER RAVISH SOOD, J. The present appeal has been filed by the assessee against the order of the CIT(A)-32, Mumbai, dt:22/07/2011, which in itself has arisen from the assessment order passed by the A.O under section 143(3) of the Income Tax Act, 1961(in short Act), dated 29/12/2010. 2. The brief facts of the case are that the assessee filed her return of income for A.Y. 2008-09 on 01.10.2008, declaring total income of ₹ 1,19,71,950/-. The case of the assessee was taken up for scrutiny proceedings u/s 143(2) of the Act . That during the course of scrutiny proceedings it was observed by the A.O that the assessee who had sold a Flat No. 62/B in Grand Paradi Co.op. Hsg. Society Ltd., situated at 572, Dabyseth Hill, August Kranti Marg, Mumbai - 400 036, vide a transfer deed dated:24/08/2007, for a consideration of ₹ 4,25,00,000/-, had thereafter invested part of sale proceeds for purchase of the following residential flat- properties at Powai, Mumbai : Sr. No. Description of the flat purchased Names of the purchasers Purchase consideration Date of purchase d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 50%. Thus the A.O in light of his aforesaid observations, therein restricted the entitlement of the assessee to 50% of the investment in one property, i.e. Flat No. 1508, wherein the assessee was the first name holder, and as such allowed deduction u/s 54 of the Act ? at an amount of ₹ 41,54,125/- (i.e. 50% of Rs. - 83,08,250/-). The A.O therein proceeded with and assessed the income of the assessee at ₹ 2,47,35,010/-. 3. The assessee assailed the assessment order before the CIT(A). The CIT(A) during the course of the appellate proceedings considering the facts of the case which therein revealed that the Flats No. 1508 and 1509 were adjacent and were being used by the assessee as a single residence, therein relying on the order of the Special Bench of the Tribunal so passed in the case of ITO Vs. Sushila N. Jhaveri [292 (AT) 1-Mum(SB)], therein vacated the restriction by the A.O of the entitlement of the assessee as regards her claim of deduction u/s 54 only as regards the Flat No. 1508 (supra). It was however observed by the CIT(A) that though the assesssee was eligible for claim of deduction u/s 54 as regards her investment made in both the flats, for the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he new flat was made exclusively in the name of the adopted son of the assessee, whereas in the case of the present assessee the flats were exclusively purchased by the assessee, who had included the name of her daughter only for the sake of convenience, keeping in view her advanced age. The Ld. A.R further in support of his aforesaid contention that the inclusion of the name of the daughter in the purchase deed would not materially affect the entitlement of the assessee towards claim of deduction u/s 54, in light of the fact that the investment made towards the purchase of the aforesaid new residential Flats no. 1508 and 1509 (supra) was made to the last of the paisa by the assessee, and no investment was made by the daughter, therein relied on the following judicial pronouncements/ orders :- Sr. No. Particulars 1. CIT Vs. Kamal Wahal 351 ITR 4 (Delhi) 2. Director of Income Tax Vs. Mrs. J ennifer Bhide 349 ITR 80(Kar) 3. CIT Vs. Ravinder Kumar Arora 342 ITR 38 (Delhi) 4. CIT Vs. Natarajan 287 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0% of the aforesaid Flats No. 1508 and 1509 (supra), therefore her entitlement towards claim of deduction u/s 54 was liable to be restricted to only 50% of the total investment of ₹ 1,66,16,500/-, and as such had rightly restricted the claim of deduction u/s 54 in the hands of the assessee to the extent of ₹ 83,08,250/-. It was thus submitted by the Ld. D.R that the order of the CIT(A) may therein be upheld and the appeal filed by assessee be dismissed. 5. We have heard the Ld. Representatives for both the parties and perused the orders of the lower authorities, as well as the material placed on record before us. We are of the considered view that a bare perusal of the statutory provisions contemplated u/s 54 though requires the assessee to make an investment towards purchase or construction of a residential house, the income of which is chargeable under the head Income from House Property , within the stipulated period provided in the said statutory provision, but it does not specifically prescribe as to in whose name the investment is to be made. We are however not persuaded to subscribe to the contention of the Ld. A.R that investment made by the assessee in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 312 ITR 40 (Bom), wherein the Hon ble High Court had upheld the observations of the Tribunal, as under:- 8. A plain reading of section 54F would show that it is the assessee who has to invest the capital gain in the new construction of a residential house in his name. The expression that the assessee had purchased or constructed a new asset in sub-section (1) would only mean that the new asset has to be in the name of the assessee. The proviso of sub section (1) makes the position very clear inasmuch as it says that the assessee shall not own any residential house on the date of transfer or purchase a residential house within 1 year of the transjer or construct residential within a period of 3 years, other than the new asset. Thus, reading of sub-section (1) together with the proviso would show that the investment in the new asset by the assessee has to be in his own name and not in the name of any other person. The legal consequences of purchase of the new asset by the assessee in the name of his son is to constitute his son as the beneficial owner of the new asset. The assessee has, therefore, not made the investment in his name. Therefore, he had rendered himself liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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