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TMI Blog2019 (8) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... y considering the facts and circumstances of the case, the benefit u/sec. 54F cannot be denied to the assessee simply because sale proceeds invested in a plot belonging to her husband. Section 54F is being a beneficial provision. As per the judgments of various High Courts and the tribunals where investment is made by the spouse, benefit has been allowed by construing the definition of assessee liberally. In the present case, the sale proceeds has been invested in the plot belonging to the assessee s husband, therefore, the case law relied on by the ld. CIT(A) has no application to the facts of the present case. Keeping in view of the facts and circumstances of the case and also by following the judgments of M/S. B. SURENDRA CHOWDARY, [ 2017 (8) TMI 1563 - ANDHRA PRADESH HIGH COURT] , SHRI KAMAL WAHAL [ 2013 (1) TMI 401 - DELHI HIGH COURT] and V. NATARAJAN. [ 2006 (2) TMI 136 - MADRAS HIGH COURT] and also N. RAM KUMAR [ 2012 (10) TMI 145 - ITAT HYDERABAD] we are of the opinion that the assessee is entitled for deduction u/sec. 54F of the Act. Thus, these appeals filed by the assessee are allowed. - ITA No. 294 & 295/VIZ/2016 - - - Dated:- 31-7-2019 - Shri V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2008-09 and ₹ 94,44,845/- for the A.Y. 2009-10. The assessee has not raised any objection for computation of capital gains determined by the Assessing Officer. The only issue before us is in respect of denial of deduction claimed by the assessee u/sec. 54F of the Act. The Assessing Officer disallowed the claim of the assessee mainly on the ground that the investment made in the house property was not in the assessee s name. In the assessment order, the Assessing Officer has noted that the assessee has failed to produce the construction bills/vouchers, plan approval, property tax assessment during the assessment proceedings and therefore the claim of deduction u/sec. 54F was disallowed. During the remand proceedings, the assessee filed a copy of plan approval without any date and also copy of GVMC property tax challan which related to 2015. Therefore, the Assessing Officer stated in his report that no proof whatsoever could be furnished by the assessee within the stipulated period of 03 years as required u/sec. 54F of the Act and also observed that the said property was stated to be constructed in the land belonging to the husband of the assessee and the property tax assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative has relied on the judgment of the Hon'ble Andhra Pradesh High Court in the case of Late Mir Gulam Ali Khan Vs. CIT [(1987) 165 ITR 228] and also the decision in the case of Pr.CIT Vs. M/s. B. Surendra Chowdary in ITTA No. 519/2017, dated 21/08/2017. He also relied on the decision of Hon'ble Delhi High Court in the case of CIT Vs. Kamal Wahal [(2013) 351 ITR 04] and also the decision of Hon'ble Madras High Court in the case of CIT Vs. V. Natarajan [(2008) 287 ITR 271]. Insofar as case-law relied on by the ld. CIT(A) in the case of Ganta Vijayalakshmi (supra) has no application to the facts of the case. 6. On the other hand, ld.DR strongly supported the orders passed by the authorities below. 7. We have heard both the sides, perused the material available on record and orders of the authorities below. 8. The assessee has sold certain property and sale proceeds received, has invested in construction of the plot belonging to her husband and the same is claimed exemption u/sec. 54F of the Act. The Assessing Officer has denied the claim of the assessee on the ground that she has not constructed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 54F of the Act for a property alleged to have been purchased in the name of assessee‟s wife instead of purchasing the same in her name as provided under the provisions of Sec. 54F of the Act? 9.1 In this case the Assessing Officer disallowed the claim of the assessee u/sec. 54F on the ground that investment made by the assessee was in the name of his wife and not in the assessee s name. However, the ld. CIT(A) allowed the appeal of the assessee and the said order was also confirmed by the Tribunal. Aggrieved by the concurrent orders passed by the Commissioner (Appeals) and the Tribunal, the Revenue has filed an appeal before the Hon'ble High Court. 9.2 The Hon'ble High Court has observed from the orders of the Commissioner (Appeals) and the Tribunal that both of them proceeded on the basis of the interpretation given by various Courts, including the members of the family of the assessee, within the definition of the expression assessee . The Commissioner (Appeals) as well as the Tribunal held that the investment made by the assessee was qualified for the benefit of Section 54F and the appeal of the Revenue is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchased the new house in the name of a stranger or somebody who is unconnected with him. He has purchased it only in the name of his wife. There is also no dispute that the entire investment has come out of the sale proceeds and that there was no contribution from the assessee's wife. 10. Having regard to the rule of purposive construction and the object which Section 54F seeks to achieve and respectfully agreeing with the judgment of this Court, we answer the substantial question of law framed by us in the affirmative, in favour of the assessee and against the revenue. 11. In the case of CIT Vs. V.Natarajan [(2007) 287 ITR 271] the Hon'ble Madras High Court has observed that assessee has sold the property and purchased another property in the name of his wife and held that assessee was entitled for exemption u/sec. 54 of the Act. 12. The ITAT, Hyderabad Bench in the case of N. Ram Kumar Vs. ACIT in ITA No. 1901/HYD/2011, dated 10/08/2012 has considered the deduction u/sec. 54F and also considered the decisions of various High Courts and the Tribunals and allowed the claim of the assessee u/sec. 54F(1) of the Act. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as the person who purchased the house, that is, the assessee must be one and the same person. The identity must be the same. We are unable to accept this contention. The object of grating exemption u/s 54 of the Act is that a person who sells a residential house for the purpose of purchasing another convenient house must be given exemption so far as capital gains are concerned. As long as the sale of the house and purchaseof 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 ₹ 1,000 as earnest money and subsequently the legal representative completed the transaction within a period of one year from the date of the death of the deceased. The sale and purchase are two lin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. ITO reported in 131 ITR 597 has observed in the following manner:- A statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. Where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the legislature, the court may modify the language used by the legislature or even do some violence to it, so as to achieve the obvious intention of the legislature and produce a rational construction. It is also well settled principle of law that when there are divergent views, to give effect to a beneficial provision the view favourable to the assessee has to be adopted. In the aforesaid view of the matter, following the ratio laid down by the jurisdictional High Court in case of late Mir Gulam Ali Khan(supra), by the Hon‟ble Delhi High Court in case of CIT vs. Ravinder Kumar Arora (supra) and also by the ITAT, Madras Bench in 33 TTJ 466 (supra), we hold that the assessee will be entitled for deduction u/s 54F for the flat purchased in the name of his daughter subject to the restrictions under the proviso to section 54 ..... 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