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TMI Blog2012 (10) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... evant previous year, the assessee has sold 1,10,000 shares for a consideration of Rs. 96,36,519. Out of sale consideration of shares, the assessee invested a sum of Rs. 55,68,662/- for purchasing a flat in the name of his minor daughter. The assessee claimed the amount invested in purchase of flat as a deduction u/s 54F(1) of the Act. The AO disallowed the deduction claimed on the ground that the flat was not purchased by the assessee in his own name. The AO relying upon different High Courts' decisions and also a decision of ITAT, Nagpur Bench in case of ITO v. Prakash Timaji Dhanjode [2002] 258 ITR (AT) 114 held that the assessee is not entitled for deduction u/s 54F(i). Assessee being aggrieved by the assessment order filed an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned AR submitted that when there is no dispute raised by the department to the fact that the investment was made by the assessee in purchasing the flat only because the registration was made in the name of minor daughter, the assessee cannot be deprived of the exemption u/s 54 of the Act. In support of his contentions, the assessee relied upon the following case law. (i) CIT v. V. Natarajan [2006] 287 ITR 271 (ii) CIT v. Gurnam Singh [2010] 327 ITR 278 (iii) CIT v. Ravinder Kumar Arora [2012] 342 ITR 38 The learned AR relying upon a judgment of Jurisdictional High Court in the case of late Mir Gulam Ali Khan v. CIT [1987] 165 ITR 228 submitted that the word 'assessee' also includes the legal heir. 5. The learned DR, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solely on the ground that the flat has been registered in the name of his minor daughter. The AO on interpreting section 54F came to hold that for claiming exemption u/s 54F, the house has to be purchased in the name of the assessee only. At this stage, it is necessary to look into the provisions of section 54F(1) of the Act which are quoted hereunder. " ..... The assessee has within a period of one year before or after the date on which the transfer took place purchased, or has within a period of three years after that date constructed a residential house......." A bare reading of section 54F(1) makes it clear that there is no requirement that the house has to be purchased in the name of the assessee only. The only requirement of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another convenient house must be given exemption so far as capital gains are concerned. As long as the sale of the house and purchase of another house are part of the same scheme, the lapse of sometime between the sale and purchase makes no difference. The word "assessee" must be given a wise and liberal interpretation so as to include his legal heirs also. There is no warrant for giving too strict an interpretation the word "assessee" as that would frustrate the object of granting the exemption and what is more, in the instant case, the very same assessee immediately after the sale of the house entered into an agreement for purchasing another house and paid a sum of Rs. 1,000 as earnest money and subsequently the legal representative comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ITAT in the case of Prakash Timaji Dhanjode (supra) have held a different view to the effect that for getting exemption u/s 54F, the property has to be purchased in assessee's name. The intention of the legislature in introducing sec. 54F as explained in Board's Circular No.346 dated 30th June, 1982 is for encouraging house construction. It is an encouragement given to the assessee to exchange one of the residential houses for another or where he has none to convert any of his long term assets into a residential house. The object behind such a provision is to encourage large scale house building activity or investment in house property to meet acute housing shortage in the country. Therefore, looking at the legislative intent, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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