TMI Blog2022 (1) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer to ascertain the payments, hence, no exception can be found with this finding of the Tribunal. Accordingly, we confirm the same. As regards Section 54F assessee claimed deduction under Section 54 and 54F in respect of long term capital gain arising from the said sale of land. The Authorities observed that the assessees [therein] had two residential houses having one half share each therein on the date of sale of the land, thereby rejected assesses claim. Tribunal held that on date of sale of long term assets meant complete residential house and would not include shared interest in a residential house. On appeal by the Revenue before this Court, it was held that co-owner is the owner of a house in which he has share and that his right, title and interest is exclusive to that extent of his share and that he is the owner of the entire undivided house till it is partitioned. The right of a person, may be one half, in the residential house cannot be taken away without due process of law or it continues till there is a partition of such residential house. With great respect, this judgment would not be of any assistance to the Revenue to deny the benefit to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law? 2. The assessee, a salaried person working in M/s IGUS India Private Limited, had filed a return of income showing the capital gains for the assessment year under consideration. CLAIM OF THE ASSESSEE: 3. During the relevant assessment year, the assessee had sold the land of Angamaly, Kerala [original asset] to M/s. Fashion Jewellery vide sale deed dated 10.04.2012 for a consideration of ₹ 60 Lakhs. Long term capital gains resulting from this transaction was claimed as eligible for exemption under Section 54F of the Act. The assessee claimed that on the date of sale of land i.e., 10.04.2012, he was the owner of only one residential house at Angamaly, Kerala; prior to 10.04.2012, the appellant invested in a residential house Flat No.3E, 3rd Floor, E Block, Orchard Green, Domlur, Bangalore-560071 purchased in the name of his wife vide sale deed registered on 08.12.2011. Another residential house owned by the assessee at HAL 2nd Stage, Kodihalli Extension, Bangalore was gifted by the appellant to his wife and son vide gift deed registered on 03.01.2012. The appellant purchased a land at Erumad, Tamil Nadu vide sale deed registered on 05.09.2012 for ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be allowed inasmuch as the investment made in the name of the asssessee s wife but was remanded to CIT[A] regarding eligibility of ₹ 60 lakhs and the payment towards the expenses claimed to the Assessing Officer. In the miscellaneous petition eligibility of ₹ 90 lakhs was also directed to be examined by the Commissioner of Income Tax [Appeals]. 6. As regards payment towards stamp duty amounting to ₹ 12,76,800/- paid by way of Demand Drafts from State Bank of India, Bangalore and City Bank, it has been observed that the Tribunal is not able to identify to whom these accounts belong to and accordingly, directed the assessee to file all requisite details before the Assessing Officer, who shall ascertain the payment and if such payments are found to be made by the assessee from his account, the benefit should be given to the assessee by permitting deduction under Section 54 of the Act. Claim of brokerage of ₹ 5,00,000/- was disallowed. As regards the claim made under Section 54F of the Act, the same came to be rejected. M.P.No.163/Bang/2020 was preferred by the assessee, the same came to be allowed in part directing Commissioner of Income Tax [Appeals] to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned that there is no requirement that investment should be made in the name of the assessee only. There being no substantial material to identify to whom the payment of stamp duty was made by the assessee, the matter was remanded to the Assessing Officer for verification of the facts, which cannot be found fault with. As regards Section 54F of the Act, it was argued that the assessee having claimed the benefit under Section 54 of the Act on the premise that the investment was made by him in the new asset purchased in the name of his wife, cannot take a contradictory stand in respect of the claim made under Section 54F of the Act. The phrase owns employed in proviso (a)(i) of Section 54F(1) of the Act has to be interpreted analogous to Section 54 of the Act, no different analogy could be applied with respect to Section 54F of the Act. 11. We have carefully considered the rival submissions made by the learned counsel appearing for the parties and perused the material on record. 12. The undisputed facts are that the assessee sold a land at Angamaly, Kerala [original asset] to M/s. Fashion Jewellery vide sale deed dated 10.04.2012 for a consideration of ₹ 60 Lakhs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, one residential house in India, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- xxxxxxx 54F. (1) Subject to the provisions of subsection (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence; 27. For the purposes of Sections 22 to 26- (i) an individual who transfers otherwise than for adequate consideration any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, shall be deemed to be the owner of the house property so transferred; 21. This provision would not assist the Revenue to consider the assessee as the owner of the house property purchased in the name of his wife. Even otherwise, the provision makes it clear that it is defined only for the purposes of Sections 22 to 26 of the Act. 22. In the case of Jennifer Bhide, supra, this Court has held that to attract Section 54 as well as Section 54EC what is material is, the investment of sale consideration in acquiring the residential premises or constructing the residential premises or investing the amount in bonds set out in Section 54EC. Once the sale consideration is utilized for the purpose mentioned under Sections 54 and 54EC, the assessee is entitled to the benefit of the said provisions. Thus, it has been categorically observed that the assessee cannot be denied the benefit of deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court and we respectfully agree with the view expressed in the aforesaid judgments. 24. The object of Section 54F of the Act is to provide impetus to the house construction. The word assessee under Section 54 of the Act having been given wide and liberal interpretation so as to include his legal heirs also by judicial pronouncements, it cannot be held Section 54F also should be construed liberally. 25. Insofar as the proviso (a)(i) to Section 54F(1) is concerned, the phrase owns plays a significant role. What is relevant is the assessee should not own more than one residential house, other than the new asset, on the date of transfer of the original asset. This phrase owns is conspicuously absent in Section 54. 26. In our considered view, Section 54F of the Act which deals with capital gain and transfer of certain capital assets not to be charged in case of investment in residential house cannot be treated on par with Section 54. For qualifying for the exemption under Section 54F of the Act, what is mandatory is the investment to be made in residential house in the name of the assessee only. Section 54F encourages investment in a residential house. In the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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