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TMI Blog2024 (9) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly we allow Ground No. 2 of the assessee. Disallowance of exemption u/s 54 being 50% share of the wife in the new house property - HELD THAT:- The entire investment has been made by the Assessee and the entire TDS has been deducted by the Assessee which was duly deposited to the Government and the full value of the purchase price was reflected in the Form No. 26AS of the Assessee for the year under consideration, by following the above ratio laid down by the Jurisdictional High Court and the Coordinate Bench of the Tribunal, we find merit in Ground No. 3 of the Assessee, accordingly, we allow the Ground of the Assessee by deleting the addition made by the A.O., wherein by disallowed the exemption u/s 54 of the Act. Appeal filed by the Assessee is allowed. - Dr. B. R. R. Kumar, Accountant Member And Shri Yogesh Kumar U.S., Judicial Member For the Assessee : Sh. Shailesh Kumar, CA For the Department : Sh. Vijay B Vasanta, CIT DR ORDER PER YOGESH KUMAR U.S., JM This appeal is filed by the assessee for Assessment Year 2020-21 against the assessment order dated 27/04/2023 passed u/s 143(3) r.w.s. 144C(13) of the Act by the Assistant Commissioner of Income Tax, DCIT/ACIT-INT-Tax, Gur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the said jewellery was in possession of the assessee since long. The assessee claimed that it was ancestral jewellery and bills/invoices of purchase were not available. The assessee claimed fair market value of jewellery as on 01.04.2001 as cost of acquisition. The assessment order came to be passed u/s 143(3) read with Section 144C(13) of the Act dated 27/04/2023 by making addition of Rs. 20,10,008/- as short term capital gain and further disallowed Rs. 80,14,041/- u/s 54 of the Act being 50% wife s shares in the new house property. 4. Aggrieved by the assessment order passed u/s 143(3) r.w.s 144C(13) of the Act dated 27/04/2023, the assessee instead of filing the Appeal before this Tribunal, preferred Appeal before the CIT(A). The Ld. CIT(A), Delhi-42 vide order dated 29/02/2024 dismissed the Appeal filed by the assessee as the same is not maintainable. Thereafter, the Assessee preferred the present Appeal by challenging the impugned assessment order dated 27/04/2023 on the grounds mentioned above. 5. There is a delay of 250 days in filing the present Appeal, the Assessee filed an application for condonation of delay claiming that the Assessee instead of filing Appeal befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard both the parties and perused the material available on record. The assessee sold jewellery for consideration of Rs. 20,10,008/- and offered to tax as LTCG by claiming deduction u/s 54/54F of the Act. During the scrutiny proceedings, the assessee was called to provide evidences of cost of accusation of the jewellery and also wealth tax return. It was the case of the assessee that the jewellery were ancestral property and the bills/invoices of purchase were not available. Thus, claimed fair market value of jewellery as on 01/04/2001 as cost of accusation. During the assessment proceedings A.O. has also cross examined the wife of the assessee and the jeweler by issuing a summons u/s 131 of the Act by issuing notice u/s 133(6) of the Act. Both the persons i.e. wife of the assessee as well as the jeweler have confirmed the sale of old gold were inherited jewellery. The assessee has also produced the valuation report as on 01/04/2001 who certified that the old jewellery was sold and copy of sale bill on which old gold jewelry was duly mentioned. The Revenue Authorities neither agreed to the valuation report nor invoked the statutory provisions for referring the matter to the DVO and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering the above facts and circumstances, we delete the disallowance/addition of Rs. 20,10,008/-, accordingly we allow Ground No. 2 of the assessee. 14. Ground No. 3 of the Assessee is regarding addition of Rs. 80,14,041/- wherein the A.O. disallowed the exemption u/s 54 of the Act being 50% share of the wife in the new house property. 15. The Ld. Counsel for the Assessee submitted that the entire cost of accusation including the cost of stamp duty has been borne by the Assessee out of sale proceed of another property, all the payments were made by the Assessee through proper banking channel and duly reflected in the bank statement of the Assessee, the Assessee has also deducted the TDS on the entire purchase price and duly paid the same to the Government and full value of purchase price was also reflected in Form No. 26AS of the Assessee for the year under consideration. Further submitted that the wife of the Assessee is dependent of the Assessee, thus, the Ld. CIT(A) has committed error in disallowing the exemption u/s 54 of the Act without following the settled position of law therefore, sought for allowing the Ground No. 3 of the Assessee. 16. Per contra, the Departmental R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) - The assessee sold a residential house and invested sale consideration in purchase of a plot of land and carried out construction of a residential house thereon. The Hon'ble ITAT held that mere fact that investment in new property was made in name of his wife could not be a reason for disallowance of deduction under section 54 to assessee. f) N Ram Kumar vs. ACIT [2012] 25 taxmann.com 337 (Hyd. ITAT ) - The assessee purchase d a flat in the name of her Simran Bagga minor daughter and claimed deduction u/s 54F. The exemption was allowed by Hon'ble ITAT. g) Krishnappa Jayaramaiah vs. ITO - [2021] 125 taxmann.com 110 (Bangalore ITAT) - The assessee had invested sale consideration received on transfer of Capital Asset in purchasing a new residential property in name of his married widowed daughter and the exemption was allowed to the assessee. h) Mrs. Kamal Murlidhar Mokashi vs. ITO, Ward-8 (3), Pune [2019] 110 taxmann.com 120 (Pune - Trib.) - In order to claim deduction under section 54F, new residential house need not be purchased by assessee in his own name or exclusively in his name. 13. Further, we find that the Hon'ble Jurisdictional Delhi High Court in the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years after that date constructed 842a, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say, - (a) If the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) If the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45 : Provided that nothing contained in this sub-section shall apply where (a) the assessee, - (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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. Purposive construction is to be preferred as against the literal construction, more so when even literal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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