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TMI Blog2017 (8) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... t that payments of ₹ 10 lakh and 20 lakh paid respectively on 07/01/2008 and 13/01/2008 were towards construction or renovation of the new property, we feel it appropriate to restore the issue to the file of the Assessing Officer, with the direction to the assessee to produce / furnish all necessary evidence in support that construction/renovation work as mentioned in finishing agreement was carried out by seller of the property. In this regard, the assessee should furnish copy of return of income of the seller and income expenditure account showing such receipts from contract work and expenses incurred by her for carrying out construction/renovation work on the property or any other evidences which could establish that work of construction/renovation was actually carried out in the property and the said payment of ₹ 10 lacs and 20 lacs were towards such construction/renovation. If the amounts are found to be towards construction of the new property, then the Assessing Officer is directed to consider the deduction u/s 54F of the Act in accordance with law. Exemption under section 54F in respect of the consideration of ₹ 2 Lacs received by the assessee in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in law, the Ld. CIT(A) erred in law in not adjudicating upon the claim of exemption under section 54F of the Act made by the Appellant as regards the consideration of ₹ 200,000 received by the Appellant in cash. 2. The facts in brief of the case are that the assessee a Chartered Accountant by profession, filed return of income for the year under consideration on 26/09/2009 declaring total income of ₹ 48,23,250/-. During the year, the assessee sold one immovable property and the long-term capital gain of ₹ 33,74,045/- on such sale was claimed as deduction under section 54F of the Income-tax Act, 1961 (in short the Act ). The case was selected for scrutiny and notice under section 143(2) of the Act was issued and complied with. The Assessing Officer observed that during the year under consideration, the assessee sold one vacant plot of land at Shakti Khand, Indirapuram for sale consideration of ₹ 50,00,000/- and after reducing the indexed cost of acquisition of the said plot of land, the assessee computed long-term capital gain of ₹ 33,74,045/-. He further observed that the assessee claimed to have invested the said sale consideration towards pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alochna Goyal and to the wife of the assessee . Further, the learned CIT-(A) observed that the source from which loan has been paid, was not produced before him. In view of the observations the learned CIT-(A) held that the assessee was not entitled for deduction under section 54F of the Act. Aggrieved with the finding of the Ld. CIT-(A), the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 5. In grounds no. 1 to 5, the assessee has challenged the action of the learned CIT(A) in denying the deduction under section 54F of the Act to him. All the grounds being connected to the sole issue of deduction under section 54F of the Act, same were argued together. 5.1 The Ld. counsel of the assessee filed a paper book containing pages 1 to 158 and submitted that investment in new asset was made in the name of the wife of the assessee. The Ld. counsel referred to the decision of the Hon ble Delhi High Court in the case of CIT Vs. Ravindra Kumar Arora (2012) 342 ITR 38, wherein it is held that section 54F does not require that the new residential property should be purchased in the name of the assessee only. Relying on the aforementioned decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material on record. We find that the Ld. CIT-(A) has adjudicated the issue in dispute from para 5.7 to para-5.9 of the impugned order as under: 5.7 The documents of purchase of Saket Property were perused and these showed in that property was purchased in name of Mrs. Manisha Kishore and not in the name of the appellant. Therefore, vide order sheet entry dated 11.02.2014 was asked to explain why the exemption under Section 54F should be allowed by virus of the fact that the property was not purchased by the appellant in his own name . The appellant replied vide letter dated 25th February, 2014 and claimed that a) The Indrapuram property had been sold through Special Power of Attorney and Agreement to Sell. b) The copies of bank statement showing the sale consideration of Indrapuram property are enclosed. c) In order to claim exemption under section 54F the appellant utilized the sale consideration received from Shakti Khand, Indrapuram property towards purchase of Residential property at Saket, however, the property was purchased in the name of wife Mrs.Manisha Kishore. d) As per section 54F there is no obligation to purchase the New Residential House i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in joint name and though the appellant has claimed that the payment in respect of the loan is being done from his own sources, but no such evidence has been filed. The bank account is also jointly held by the appellant with his wife. The High Court has held that the entire sale proceeds in respect of the property should have been invested in purchase of the new asset. The appellant has claimed that the proceeds of the property has been received as under and the payment for the new asset has been made as under: S. No. Date Narration 1 Cheque No. date Payments Receipts Remarks 12. 07.01.08 Part Payment for Saket 8453 1000000 No such evidence in the sale agreement 13. 16.01.08 Part Payment for Saket 286311 2000000 No such evidence in the sale agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed directly to Mrs. Salochna Goyal, the vendor and to the wife. The source from which loan has been paid has not been produced. Thus it is apparent that the appellant is not entitled to deduction under section 54F. 5.3.1 On perusal of the submission of the assessee before the lower authorities, we find that out of the loan of ₹ 1.35 crores sanctioned against the new residential property, the seller has been paid amount of ₹ 1.25 crores only. Further, the stamp duty of ₹ 5 lakh and brokerage of ₹ 31,250/- has been claimed as paid toward purchase of the new property. Thus, according to the lower authorities investment in the new property has been made only of ₹ 1,30,31,250/- whereas, on the other hand, the assessee has claimed following additional amounts as investment for acquisition/construction of the new property: a) payment of ₹ 10 lakh on 07/01/2008 b) payment of ₹ 20 lakhs on 16/01/2008 c) payment of ₹ 1,70,000 on 29/05/2008 for purchase of air conditioners 5.3.2 The contention of the Revenue is that the above payments are not towards construction/renovation of the new property. 5.3.3 The fact that inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... joint ownership with wife. If the view of the Assessing Officer (AO) or the contention of the Revenue is accepted, it would be a derogatory step. 10. Even when we look into the matter from another angle, facts remain that the assessee is the actual and constructive owner of the house. In CIT Vs. Podar Cements (P) Ltd. Ors., (1997) 226 ITR 625 (SC), the Supreme Court has also accepted the theory of constructive ownership. Moreover, Section 54F mandates that the house should be purchased by the assessee and it does not stipulate that the house should be purchased in the name of the assessee only. Here is a case where the house was purchased by the assessee and that too in his name and wife‟s name was also included additionally. Such inclusion of the name of the wife for the above-stated peculiar factual reason should not stand in the way of the deduction legitimately accruing to the assessee. Objective of Section 54F and the like provision such as Section 54 is to provide impetus to the house construction and so long as the purpose of house construction is achieved, such hyper technicality should not impede the way of deduction which the legislature has allowed. Purposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the wife of the assessee is an independent taxpayer having her own sources of income. We also find that property has been purchased exclusively in the name of the wife of the assessee and the assessee is not co-owner of the property. The bank has sanctioned loan for purchase of the property, which is purchased in the name of wife of the assessee. The assessee has claimed that the loan has been sanctioned in the joint name of the wife of the assessee and the assessee. In our opinion, in the circumstances, it cannot be said that the assessee has made investment for purchase of the property due to the reason that loan has been primarily sanctioned to the wife of the assessee, who is having title over the property and the assessee has been joined in the loan for the purpose of repayment of the loan. The repayment of loan by the assessee is a transaction different from the transaction of investment in the property. Moreover, the assessee has not submitted any evidence of repayment of loan by him. Thus, we conclude that investment in the new property worth ₹ 1,30,31,250/- has not been made by the assessee. In view of the above facts and circumstances, we are of the opinion that f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h receipts from contract work and expenses incurred by her for carrying out construction/renovation work on the property or any other evidences which could establish that work of construction/renovation was actually carried out in the property and the said payment of ₹ 10 lacs and 20 lacs were towards such construction/renovation. If the amounts are found to be towards construction of the new property, then the Assessing Officer is directed to consider the deduction u/s 54F of the Act in accordance with law. It is needless to mention that assessee shall be afforded reasonable opportunity of being heard. 6. Accordingly, grounds No. 1 to 5 of the appeal are allowed partly for statistical purpose. 7. In ground No. 6, the assessee is claiming that the Ld. CIT-(A) has not adjudicated the issue of allowing exemption under section 54F of the Act in respect of the consideration of ₹ 2 Lacs received by the assessee in cash. 7.1 We find that the learned CIT-(A) has adjudicated the issue as under: In regard to ground no. 7, the appellant has agitated against not allowing exemption under Section 54F on the amount of ₹ 2 lacs received in cash as part of the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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