INCOME TAX ACT, 1961

Section 54F

Capital Gain - Exemption under section 54F - Purchase of new residential property in the name of wife -

Assessee had shown long-term capital gain on sale of two properties. This long-term gain amount has been invested in purchasing another property in the name of his wife. Assessee claimed that he had fulfilled/all the technical conditions for exemption of long-term capital gains under sections 54/54F. However, AO did not accept the explanation of assessee and held that assessee was not entitled to benefit conferred under section 54B if the subsequent property was purchased by a person other than assessee, including his close related even such as wife and children. Held: Section 54F mandates that the house should be purchased by the assessee and it does not stipulate that the house should be purchased in the name of the assessee only. Since the entire sale amount of long-term capital gain have been invested in purchase of other property in the name of wife of assessee, assessee would be entitled for exemption on account of long-term capital gains. Therefore, AO was directed to allow exemption of assessee.

Applied:CIT v. Podar Cement Pvt. Ltd. & Ors. 1997 TaxPub(DT) 1265 (SC)Followed:CIT v. Dinesh Verma [ITA No. 381 of 2014, dt. 6-7-2015] : 2015 TaxPub(DT) 3641 (P&H-HC); CIT v. Aar Bee Industries (2013) 357 ITR 542 (Del.) : 2013 TaxPub(DT) 2096 (Del-HC); CIT v. Kamal Wahal (2013) 351 ITR 4 (Del) : 2013 TaxPub(DT) 1087 (Del-HC); CIT v. Ravinder Kumar Arora (2012) 342 ITR 38 (Del.) : 2011 TaxPub(DT) 2178 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

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