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2018 (11) TMI 1123

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..... ude his legal heirs also and there is no warrant for giving too strict interpretation on the word "assessee" as that would frustrate the object of granting the exemption. In the case before us, the assessee and his wife are independent income tax assessee and the assessee already owned one house at Kilpauk, Chennai. The assessee therefore, cannot be said to have invested in order to avoid capital gains to tax in his hands, as u/s 54F(1) the assessee is entitled to exemption u/s 54F even if he already holds one property in his name. Therefore, the investment by the assessee of the capital gains in purchase or construction of a residential house at Alagappa Nagar, Chennai in the name of his wife will not disentitle the assessee from exemp .....

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..... ndition. Therefore, the Hon'ble Commissioner of Income Tax should have directed the Assessing Officer to allow the exemption provided in Section 54F of the Income Tax Act. For these and other grounds that may be urged at the time of hearing, it is submitted that the Order of the lower authorities be set aside or modified as may be deemed fit . 2. Brief facts of the case are that the assessee, an individual and Director of M/s. Maheshwari Brothers Coal Ltd and other group concerns of Maheshwari group, filed his return of income for the A.Y 2012-13 on 28.03.2013 admitting an income of ₹ 4,36,59,390. During the assessment proceedings u/s 143(3) of the Act, the assessee filed a revised return of income on 18.03.2015 clai .....

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..... of the owner as required u/s 54F(1) of the Act. The CIT (A) however accepted the assessee s contention that his claim u/s 54F is ₹ 28,02,308 only and accordingly restricted the disallowed the said sum. Aggrieved, the assessee is in appeal before us. 3. The learned Counsel for the assessee submitted that there is no doubt or dispute about the investments of the capital gains in the house constructed at Chennai in the name of assessee s wife. He submitted that the issue as to whether the capital gains can be invested in his wife s name and still be eligible for the exemption u/s 54F, it is covered in favour of the assessee by various decisions of the Tribunal and particularly in the case of Shri N. Ram Kumar vs. Add. CIT in ITA No .....

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..... t the facts are slightly distinguishable as the spouse/son/daughter in whose name the property was purchased/constructed did not have independent source of income. Let us therefore examine the applicability of those cases to the facts of the case before us. In the case of CIT vs. Natarajan reported in 287 ITR 271 (Mad), the assessee therein had sold a property at Bangalore and purchased a property at Anna Nagar in the name of his wife and the Tribunal had held the issue in favour of the assessee and the Hon'ble High Court had refused to interfere with the findings of the fact by the ITAT. There is no finding about the status of the wife therein, i.e., whether, she had independent source of income or not. 6. In the case of Raj Kuma .....

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..... ould have been purchased for residential purposes, must be given exemption so far as capital gains are concerned that the word assessee must be given a wide and liberal interpretation so as to include his legal heirs also and there is no warrant for giving too strict interpretation on the word assessee as that would frustrate the object of granting the exemption. In the case before us, the assessee and his wife are independent income tax assessees and the assessee already owned one house at Kilpauk, Chennai. The assessee therefore, cannot be said to have invested in order to avoid capital gains to tax in his hands, as u/s 54F(1), the assessee is entitled to exemption u/s 54F even if he already holds one property in his name. Therefore, .....

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