TMI Blog2022 (5) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee from the sale proceeds of the existing asset and yielded capital gain from the said transactions. Further we taken into consideration that the Ld AR for the assessee has placed the reliance on various decisions in which exemption u/s 54/ 54F/54B/54EC of the Act has been allowed notwithstanding the fact that investment in a new residential house was made in the name of wife/brother /sons. CIT (A) erred in not allowing the exemptions claimed u/s 54F by following the decision of following the decision of Hon'ble Rajasthan High Court in the case of Shri Kalya [ 2012 (6) TMI 239 - RAJASTHAN HIGH COURT] has not allowed the exemption claimed by the assessee u/s 54F holding /observing that the decision of the Hon'ble jurisdictional Rajasthan High Court above, the contention of the assessee cannot be accepted. We are of the considered view that the decision which was cited by the CIT (A) does not have any relevance with the present case. - Decided in favour of assessee. We are allowing the exemption claimed u/s 54F of the Act. Appeal of assessee allowed. - ITA. No. 191/JP/2021 - - - Dated:- 4-5-2022 - DR. S. SEETHALAKSHMI, JM And SHRI RATHOD KAMLESH JAYANT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of hearing. 3. Brief facts of the case are that the assessee sold immovable property situated at Plot no. C-174, RICCO Housing Colony, Sitapura, Jaipur for sale consideration of Rs.14,75,000/- on 11/10/2010. The value of which evaluated at Rs.14,79,960/- by the Stamp Duty Authority. Out of sale consideration of Rs. 14,75,000/- the assessee made investment of Rs. 7,48,000/- in the purchase of new residential house property in the name of his wife namely, Smt. Garima Singh, within the prescribed time limit as prescribed under the provisions of section 54F of the Act. Accordingly, the assessee claimed exemption u/s 54F of the Income tax Act. Consequently, no capital gain was chargeable under the head Long term capital gain on sale of above immovable property. Despite these facts, the AO while completing assessment u/s 143(3)/147 of the Act on 08/12/2018 disallowed the exemption claimed u/s 54F of the Act at Rs. 6,33,190/- and added the same to the total income of the assessee as long-term capital gain, holding/observing that since the assessee made investment in immovable property in the name of his wife and the assessee and his wife are different persons as well as se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant filed his return of income for the A.Y.2011-12, in compliance to notice u/s 148 of the Act on 26/04/2018 declaring total income at Rs.1,65,540/-. Exemption u/s 54F of the Act was claimed at` Rs. 6,33,190/-in the return of income. The AO completed assessment u/s 14(3)/147 of the Act on 08/12/2018 determining the income of the appellant at Rs. 7,98,730/-.While completing the assessment the AO did not allow exemption claimed u/s 54F of the Act on the ground that the investment in purchase of immovable property was made in the name of wife of the appellant, holding, inter-alia, that the deduction claimed by the assessee u/s 54F of the in the name of his wife cannot be allowed. It is also mentioned here that the assessee and his wife are different persons as well as separate assessee. Therefore, the said deduction is hereby disallowed and added back in the total income of the assessee on account of Long Term Gain for this year under the provisions of section 54 F of the income Tax Act, 1961. This resulted in addition of Rs.6,33,190/- on account of Long-term capital gain. Aggrieved, the assessee is in appeal. The appellant has submitted that AO was not jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the funds utilized for the investment for purchase of the property eligible under Section 54B belonged to the appellant only and merely the registered document was executed in the name of the wife and further, the wife had no separate source of income. Since in the instant case under appeal, the wife has separate source of income and is separate assessee as recorded by the assessing officer in the assessment order, the facts of the case are distinguishable from the present appeal. 5.4 Accordingly, the facts in the two cases being distinguishable from the facts in the appeal at hand; the decisions rendered in the two case laws pertaining to the jurisdictional Rajasthan High Court, relied upon by the appellant, cannot come to the rescue of the appellant. 5.5 On the other hand, it is noted that in the case of Kalya v.Commissioner of Income-tax, the Hon'ble jurisdictional Rajasthan High Court [2012] 22 taxmann.com 67 (Raj.) decided that: ...Learned counsel for the appellant canvassed that the object of granting exemption under Section 54B of the Act of 1961 is that a person who sells agricultural land for the purpose of purchasing another agricultural land mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case, is found to have rightly disallowed the exemption under Section 54B of the Act. 10. The impugned order passed by the learned Tribunal is just and apposite, based on cogent findings, with which we fully concur and thus, the same warrants no intervention. 11. For the reasons stated above, the income tax appeal fails and the same being bereft of any merit deserves to be dismissed, which stands dismissed accordingly. 5.6 In view of this decision of the Hon'ble jurisdictional Rajasthan High Court, above, the contention of the appellant cannot be accepted and the case laws cited by the appellant pertaining to other Hon'ble High Courts cannot come to the rescue of the appellant. The order of the assessing officer is accordingly, confirmed. 6. As a result, the appeal is dismissed. 7. Aggrieved by the CIT(A) order, the assessee is in appeal before us. Before the CIT (A), the assesee has reiterated that his submissions and which was not taken on record by the CIT (A). before us the Ld AR for assessee submitted a detailed Written submissions pages 1 to 5 of Paper Book which are as under : BEFORE THE HON'BLE INCOME TAX APPEL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessee only. (ii) The funds utilized in purchase of a new residential house property belonged to the appellant and there was no contribution from the wife of the appellant. Being aggrieved by the order of the AO, the appellant carried the matter in appeal before the ld. CIT(Appeals)-2 Jaipur, on 04/01/2019. Now, the ld. CIT(A) National Faceless Appeal Centre Delhi, confirmed the rejection of exemption u/s 54F of the Act, as made by the AO. It was submitted before the ld. CIT(A) that investment in the new residential house property, was made by the appellant in the name of his wife out of his own funds which were received on sale of property situated at Plot no. C-174, RICCO Housing Colony Sitapura Jaipur. Further it was submitted that no contribution was made by wife of the appellant. Section 54F of the Act, does not require that the new residential house property should be purchased in the name of the assessee. It merely says that the assessee should have purchased/constructed a residential house . It is also not necessary to purchase/construct a residential house exclusively in the name of the assessee. Apart from above facts, the reliance was placed on the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws cited by the appellant pertaining to the other Hon'ble High Courts cannot come to the rescue of the appellant. The order of the assessing officer is confirmed. The above facts clearly indicate that the ld. CIT(A) has grossly erred in facts and in law in not allowing exemption claimed u/s 54F of the Act. In support of this following facts are submitted for your kind consideration: - (i) For denying the exemption u/s 54F of the Act, the ld. CIT(A) has given his findings/observations that the wife of the assessee is having separate source of income and is separate assessee as recorded by the assessing officer in the assessment order. In this regard, it is submitted that nowhere in the assessment order it has been recorded by the AO that the assessee has separate source of income. The AO merely mentioned in the assessment order in Para 4.2 at page no.3 that the assessee and his wife are different persons as well as separate assessee. Further, it is submitted that the wife of the appellant was not assessed to tax during the period relevant to the A.Y. 2011-12. Thus, it is amply clear that the ld. CIT(A) denied the exemption u/s 54F of the Act on the basis of wrong fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apart from above, reliance is placed on the following decisions of the Hon'ble ITAT Jaipur Bench Jaipur, in support of claim of the appellant u/s 54F of the Act: - (i) Hon'ble ITAT Jaipur Bench Jaipur in ITNo.35/JP/2019, dated 12/03/2021, in the case of Shri Dharamveer Singh vs ITO Ward-2(1) Kota - A.Y. 2012-13. (Serial no.3 of Paper Book) relying on its own decisions in the case of Shri Mahadev Balai In ITA No 33/JP/2016 dated 24/132/2016 and in ITA no. 139/JP/2016 in the case of Shri Vivek Jain allowed deduction u/s 54F of the Act in respect of residential house property purchased in the name of his wife. (ii) Hon'ble ITAT Jaipur Bench Jaipur in ITA no. 995/JP/2018, dated 31/07/2019, in the case of Shri Ashok Solanki vs ITO-Ward-6(3) Jaipur allowed exemption u/s 54F of the Act in respect of investment made in purchase of a residential property in his own name along with the name of his brother. (iii) Hon'ble ITAT Jaipur Bench Jaipur in ITA No. 478/JP/2017 dated 19/02/2018, in the case of Smt. Chatru Bai vs ITO-Ward-2(3) Jaipur 2008- 09, allowed the exemption u/s 54B for making investment in a new agriculture land purchased in the name of sons o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly prayed that exemption claimed by the appellant u/s 54F of the Income tax Act, at Rs.6,33,190/- may kindly be allowed. 02. The ground no. 2 appeal is related to the ground no.1. The Id. CIT (A) has grossly erred in not properly appreciating the decisions of the of Hon'ble Rajasthan High court in the case of Shri Mahadev Balai Vs ITO Ward-7(2) Jaipur in D.B. ITA No. 136/2017 decision Other, dated 07/11/2017. In the light of legal proposition so laid down by the Hon'ble Rajasthan High court in the above case, where the investment in new house property has flown from the assessee, which is not in dispute in the case of the assessee. Only, for the reason that the investment made by the assessee in purchase of a new residential house in the name of his wife, the same cannot be the basis for the denial of deduction claimed u/s 54F of Act. Thus, it is evident that the ld. CIT (A) is not justified in not allowing exemption claimed u/s 54F of the Act. 03. The ground no. 3 of appeal is related to the ground no. 1 of appeal. In the light of above facts exemption u/s 54F, as claimed by the appellant may kindly be allowed. 8. The Ld. DR, on the other hand strongly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is that the investment is made by the assessee in his own name but the legislature while using language has not used specific language with precision and the second reason is that view has also been taken by the Delhi High Court that it can be in the name of wife. In that view of the matter, the contention raised by the assessee is required to be accepted with regard to Section 54B regarding investment in tubewell and others. In our considered opinion, for the purpose of carrying on the agricultural activity, tubewell and other expenses are for betterment of land and therefore, it will not considered a part of investment in the land and same is required to be accepted. 13. The CIT (A) erred in not allowing the exemptions claimed u/s 54F by following the decision of following the decision of Hon'ble Rajasthan High Court in the case of Shri Kalya Vs CIT (251 CTR 174) has not allowed the exemption claimed by the assessee u/s 54F of the Act at Rs. 6,33,190/- holding /observing that the decision of the Hon'ble jurisdictional Rajasthan High Court above, the contention of the assessee cannot be accepted. We are of the considered view that the decision which was cited by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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