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| The Tax Publishers2019 TaxPub(DT) 5682 (Del-Trib) INCOME TAX ACT, 1961
Section 54F
The appellate authorities have power to consider a claim not made in the return of income. Deduction under section 54F should not be disallowed, merely because the property has been purchased in the name of the wife of assessee when the consideration for the purchases has flown from the sale proceeds of the capital asset.
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Capital gains - Deduction under section 54F - Property purchased in the name of assessee's wife - Claim made for the first time before CIT(A)
Assessee claimed deduction under section 54F by raising an additional ground before CIT(A). However, CIT(A) rejected the additional ground contending that no new claim could be made during the appellate proceedings except through valid return of income or a valid revised return of income. CIT(A) also denied the exemption claimed under section 54F on account of the land being purchased in the name of the wife of the assessee. Assessee contended that since the entire payments were made out of his bank account, deduction under section 54F could not be denied just because the property was purchased in the name of his wife. Held: In view of CIT v. Pruthvi Brokers and Shareholders Pvt. Ltd. (2012) 349 ITR 336 (Bom) : 2012 TaxPub(DT) 2671 (Bom-HC), CIT(A) was not correct in holding that the appellate authorities have no power to consider a claim not made in the return of income. Moreover, assessee should not be denied the benefit of deduction under section 54F merely because the property has been purchased in the name of his wife when the money has been flown from his bank account, wherein the sale proceeds were deposited. However, as this fact needs verification, this issue was restored to AO with a direction to verify the bank account of assessee.
Relied:CIT v. Pruthvi Brokers and Shareholders Pvt. Ltd. reported in (2012) 349 ITR 336 (Bom) : 2012 TaxPub(DT) 2671 (Bom-HC), Goetze (India) Ltd. v. CIT reported in (2006) 284 ITR 323 (SC) : 2006 TaxPub(DT) 1528 (SC) and the decision of Hon'ble Delhi High Court in the case of CIT v. Jai Parabolic Springs Ltd. (2008) 306 ITR 42 (Del) : 2008 TaxPub(DT) 1881 (Del-HC),CIT v. Shri Kamal Wahal reported in (2013) 351 ITR 4 (Del) : 2013 TaxPub(DT) 1087 (Del-HC), CIT v. V. Natarajan reported in (2006) 287 ITR 271 (Mad) : 2007 TaxPub(DT) 0183 (Mad-HC) , DIT v. Mrs. Jennifer Bhide reported in (2012) 349 ITR 80 (Karn) : 2011 TaxPub(DT) 1950 (Karn-HC)
REFERRED : CIT v. Ravinder Kumar Arora (2012) 342 ITR 38 (Del) : 2011 TaxPub(DT) 2178 (Del-HC)
FAVOUR : In assessee's favour by way of remand
A.Y. : 2015-16
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