2022 (7) TMI 1517 - AT - Income Tax

LTCG - deduction u/s 54B - properties purchased by the assessee in the name of the assessee s wife - HELD THAT - Hon ble Supreme Court in the case of Dilip Kumar 2018 (7) TMI 1826 - SUPREME COURT as held that while giving benefit to the assessee the provision needs to be interpreted strictly and in case there is ambiguity the benefit of such ambiguity cannot be claimed by the assessee and it must be interpreted in favour of the revenue. As decided in the case of Antony Parakal Kurian 2022 (1) TMI 601 - KARNATAKA HIGH COURT held that the phrase owns used by the proviso (a)(i) to section 54F(1) 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. The Hon ble Court held that Section 54F encourages investment in a residential house. For qualifying for the exemption under section 54F what is mandatory is the investment to be made in a residential house in the name of the assessee only. Section 54F shouldn t be construed liberally to give wide and liberal interpretation to the word assessee so as to include the assessee s legal heirs as well. Thus we decline to interfere with the decision of the ld. CIT(A) in disallowing the claim of deduction u/s 54B with regard to the agricultural land purchased - Decided against assessee.

Summary

Issues involved: Adjudication on whether properties purchased by the assessee in the name of the assessee's wife are eligible for deduction u/s 54B.

Summary:
The appeal was filed by the assessee against the order of ld. CIT(A)-1, Gurgaon dated 02.02.2017. The assessee declared an income of Rs. 8,72,370/- and claimed a deduction u/s 54B of Rs. 65,15,210/-. The key issue was whether properties purchased in the name of the assessee's wife are eligible for deduction u/s 54B.

The Hon'ble High Court of Karnataka and other cases allowed similar claims of the assessee. However, the Hon'ble Supreme Court emphasized strict interpretation of provisions in favor of revenue in case of ambiguity.

The Hon'ble Karnataka High Court highlighted that Section 54F requires investment in a residential house in the name of the assessee only, not legal heirs. The Division Bench and the Hon'ble Jurisdictional High Court of Punjab & Haryana also emphasized the importance of property ownership by the assessee for claiming exemptions.

Considering the legal propositions and facts of the case, the Tribunal declined to interfere with the decision of the ld. CIT(A) in disallowing the claim of deduction u/s 54B for properties purchased in the name of the assessee's wife. Consequently, the appeal of the assessee was dismissed.