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2021 (2) TMI 902 - AT - Income TaxExemption u/s. 54F - assessee has sold the property situated at 70, Kannamangala Vilalge, Kasaba Hobli, Devanahalli Taluk, Bangalore along with legal heirs - HELD THAT - In the case before us, the assessee's married widowed daughter is having no independent source of income and is fully dependent on the assessee, on the death of her husband on 20.12.2017. This fact was also clarified by filing a Joint Affidavit by Smt. Shailaja J and the assessee dt.11.12.2018. Being so, in our opinion, the statute should be construed liberally; since the provisions permit economic growth has to be interpreted liberally, restriction on it too has to be construed so as to advance the objective of the provisions not to frustrate it. We are of the opinion that the assessee has invested the sale consideration on transfer of Capital Asset in purchasing a new residential property in the name of Smt. Shailaja J who is being married widowed dependent daughter of the assessee and also legal heir of the assessee. Accordingly, we direct the AO to grant exemption u/s. 54F of the Act on the amount invested in purchase of residential house in his daughter s name. This ground of appeal of assessee is allowed. Disallowance of selling expenses - HELD THAT - The assessee has not furnished the full details of selling expenses before the lower authorities. Hence in the interest of justice, we remit this issue to the file of Assessing Officer for fresh adjudication and with a direction to the assessee to furnish the details before the Assessing Officer.
Issues Involved:
1. Deduction under Section 54F for investment in residential house property in the name of the assessee's widowed daughter. 2. Disallowance of selling expenses claimed by the assessee. Detailed Analysis: Issue 1: Deduction under Section 54F The primary issue revolves around whether the assessee is entitled to claim a deduction under Section 54F of the Income Tax Act for investing in a residential house property in the name of his widowed daughter. The assessee argued that the property sold was a Hindu Undivided Family (HUF) property, and the sale proceeds were invested in a residential house in the name of his dependent widowed daughter, who is also a legal heir. The assessee relied on various judgments to support his claim, including cases where investments in the names of spouses or legal heirs were allowed under Section 54F. The Revenue contended that the investment should be in the name of the assessee himself, not in the name of his daughter, and thus the exemption under Section 54F should not be granted. Upon reviewing the facts and the relevant legal provisions, the Tribunal noted that Section 54F does not explicitly require the new residential property to be purchased in the name of the assessee. The Tribunal emphasized a purposive interpretation of the law, favoring a liberal approach where the investment in the name of a dependent legal heir, such as a widowed daughter, should be considered valid for the exemption. The Tribunal cited several judicial precedents supporting this liberal interpretation, including decisions from the Madras High Court, Punjab & Haryana High Court, and Andhra Pradesh High Court. Ultimately, the Tribunal directed the Assessing Officer to grant the exemption under Section 54F for the amount invested in the residential house in the name of the assessee's widowed daughter, thereby allowing this ground of appeal. Issue 2: Disallowance of Selling Expenses The second issue concerns the disallowance of ?12 lakhs claimed by the assessee as selling expenses related to the transfer of capital assets. The lower authorities disallowed this claim due to the lack of evidence or a detailed breakdown provided by the assessee. The Tribunal decided to remit this issue back to the Assessing Officer for fresh adjudication. The assessee was directed to furnish the necessary details and evidence regarding the selling expenses to substantiate the claim. Conclusion The appeal was partly allowed. The Tribunal granted the exemption under Section 54F for the investment made in the name of the assessee’s widowed daughter and remitted the issue of selling expenses back to the Assessing Officer for further consideration.
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