2020 (11) TMI 203 - AT - Income Tax

Capital gain computation - sale of joint property - assessee s claimed that, they are entitled to 1/6th share, in the total property under Hindu succession Act and that, they have sold the joint property along with their Mother, 1 sister and sons of their Brothers - AO from documents filed by assessee observed that, assessee was entitled to 1/4th share - HELD THAT - On perusal of sale deed assessee along with her mother and 2 sisters. It is also recorded in sale deed that, by virtue of judgment and decree dated 29/05/2003, widow of Late M.Murthy and her son Prakash were also considered to be holding share in the said property sold by assessee, her mother and 2 sisters. Merely because sale consideration was distributed amongst assessee her mother and 2 sisters, will not dissolve the right of widow of Late M.Murthy and her son Prakash - amount disbursed to these legal hairs is not clear from the sale agreement filed in the paper book. Under such circumstances we find it necessary to send back this issue to Ld. AO for verification in respect of share received by widow of Late M.Murthy and her son Prakash from sale price of land at measuring 1 acre 20.04 Gunta, bearing survey No. 81/2. We direct Ld. AO to call for these people to enquire upon amount disbursed to them and accordingly compute share received by assessee s before us for purposes of capital gains. Deduction u/s 54F towards investment in new residential property - investment in property in the name of a son - HELD THAT - Strict interpretation cannot be given to exemption provisions. As we have already remitted the issue in respect of sale consideration to be computed in the hands of assessee to Ld.AO, this issue also is remanded to Ld.AO to determined claim under section 54F in accordance with share computed in the hands of assessee. Investment made by assessee jointly with her sister and agricultural land cannot be considered for exemption under section 54F and accordingly rejected. Ld. AO may consider investment by assessee s in respect of residential property to the extent of share computed in their hands of assessee. Appeal of assessee allowed for statistical purposes.

Summary

Issues:
1. Share in sale consideration
2. Deduction under section 54F

Share in Sale Consideration:
The appeals were filed against orders passed by the Ld. CIT (A) for the assessment year 2015-16. The issue revolved around the share in the sale consideration of a property sold jointly by the assessee, her mother, sisters, and sons of brothers. The assessee claimed a 1/6th share, but the Ld. AO observed a 1/4th share based on verification. The Ld. CIT (A) upheld the 1/4th share, considering the ownership of the property and the sale deed. However, discrepancies arose regarding the share received by other legal heirs. The Tribunal directed the Ld. AO to verify and compute the share received by all legal heirs for capital gains assessment.

Deduction under Section 54F:
Regarding the claim under section 54F for investment in a new residential property, the Ld. AO rejected the claim as the property was purchased in the name of the assessee's son and included investment in agricultural land. The Ld. CIT (A) also denied the exemption, stating that the investment was not eligible. The Tribunal remanded the issue to the Ld. AO for reevaluation in line with the computed share in the sale consideration. It clarified that the investment made jointly with the sister and in agricultural land could not be considered for exemption under section 54F. The assessee was directed to provide evidence to substantiate the investment in the residential property.

The Tribunal allowed the appeals for statistical purposes, remanding both issues to the Ld. AO for further assessment in accordance with the directions provided. The judgment was pronounced on 21st September 2020.