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2024 (8) TMI 113 - AT - Income TaxLTCG - quantum of deduction allowable u/s 54F on account of purchase of new residential house joint name - Assessee allowed 50% of claim as assessee has purchased new residential house in joint name with her daughter - HELD THAT - It has been held time and again that the provisions of section 54F are beneficial provisions intending for the purchase and construction of new residential house. The assessee and her husband admittedly are old aged. The house has been purchased in joint name with their only daughter who is the only legal heir of the assessee and her husband. In our view, the lower authorities were not justified in denying the deduction of the beneficial provisions of section 54F to the assessee, mainly because of the assessee is an old aged lady, has included the name of his daughter in the purchase deed who is the only legal heir and life support in their old age. As decided in SHRI GURNAM SINGH 2008 (4) TMI 28 - PUNJAB AND HARYANA HIGH COURT deduction u/s 54B could not be denied merely because the land was purchased in joint name of assessee and his only son who was bachelor and dependent upon him. Also in the case of CIT Vs Kamal Wahal 2013 (1) TMI 401 - DELHI HIGH COURT in respect of claim of deduction u/s 54F has held that where the new house was purchased in the name of the wife of the assessee and it was established that the purchase consideration was invested out of the property sold by the assessee, the deduction cannot be denied u/s 54F of the Act. Thus, the assessee is entitled to 100% of the deduction claimed u/s 54F of the Income Tax Act. Accordingly, the appeal of the assessee stands allowed.
Issues involved:
Quantum of deduction allowable u/s 54F of the Income Tax Act. Analysis: The appeal was filed against the order of the National Faceless Appeal Centre regarding the deduction allowable to the assessee u/s 54F of the Income Tax Act. The primary issue revolved around the quantum of deduction concerning the purchase of a new residential house. The lower authorities restricted the deduction claimed by the assessee to 50% as the house was purchased in joint name with her daughter. However, the counsel for the assessee argued that the assessee and her husband were elderly individuals, and the house was bought jointly with their daughter, who was their only legal heir. It was emphasized that the capital gains earned were invested in the new residential house. The Tribunal noted that section 54F aimed at facilitating the purchase and construction of new residential properties, especially for senior citizens. Referring to previous court decisions, including those of the Hon'ble High Courts of Punjab & Haryana and Delhi, the Tribunal concluded that the deduction under section 54F could not be denied merely because the property was purchased in joint names, especially when the purchase consideration was invested from the proceeds of the sold property. Therefore, the Tribunal allowed 100% of the deduction claimed u/s 54F of the Income Tax Act, ruling in favor of the assessee. The Tribunal highlighted the importance of the beneficial provisions of section 54F, particularly for elderly individuals like the assessee and her husband. It emphasized that the property was purchased jointly with their daughter, who was their only legal heir and support in their old age. The Tribunal found that the lower authorities were unjustified in denying the deduction based on the joint ownership of the property. By referencing relevant court decisions, the Tribunal established that similar claims for deduction under section 54F had been upheld in cases where the property was purchased jointly with family members. The Tribunal's decision was influenced by the fact that the investment in the new house was made using the proceeds from the sale of securities, and the joint ownership did not negate the eligibility for the deduction. Consequently, the Tribunal allowed the appeal of the assessee, granting the full deduction claimed under section 54F of the Income Tax Act. In conclusion, the Tribunal's judgment focused on the interpretation and application of section 54F of the Income Tax Act concerning the deduction allowable for the purchase of a new residential house. By considering the specific circumstances of the case, including the age of the assessee, the joint ownership with the daughter, and the investment source, the Tribunal concluded that the assessee was entitled to the full deduction under section 54F. The decision aligned with previous court rulings that emphasized the intent and purpose of the provision to facilitate property acquisition for taxpayers, even in cases of joint ownership with family members.
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