This can be an appeal filed by the assessee up against the purchase of ld. CIT(A)-III, Jaipur dated 16.12.2015 for Assessment 12 months 2012-13 wherein the assessee has challenged the action of ld. CIT(A) in confirming the dis allowance of exemption of Rs. 30,00,000/- claimed u/s 54F regarding the Act.

Shortly reported, the important points for the instance are that throughout the year into consideration, the assessee has offered three agriculture lands belonging to him for the purchase consideration of Rs. 99,25,000. The assessee has bought another land that is agricultural a consideration of Rs. 32,00,000/- for which deduction u/s 54F has been reported and same had been permitted by the Assessing Officer and it is maybe not in dispute before us. The assessee has additionally bought a property that is residential 23.05.2011 for a purchase consideration of Rs. 30,00,000/- when you look at the title of their spouse, Smt. Nikita Jain, and stated deduction u/s 54F for the Act and which can be in dispute before us.

The assessee was asked to show cause as to why the claimed u/s 54F of the Act, 1961 may not be disallowed, as the property was not owned in the name of assessee during the course of assessment proceedings. Responding, the assessee presented that the consideration for such property ended up being paid of repayment of advance from the assessee received from Narvik Nirman & Financiars Pvt. Ltd. and it also was further submitted that the latest house that is residential not be purchased because of the assessee in his own title neither is it necessary it must certanly be purchased solely in the title. It absolutely was submitted that the assessee have not purchased the house that is new the name of a complete stranger and whole investment has arrived from the supply of the assessee and there was clearly no share through the assessee’s wife. The submission associated with assessee was considered although not discovered acceptable towards the Assessing Officer. The property which was sold was belonging to the assessee whereas the reinvestment in property (residential house) has been made in the name of Smt as per Assessing Officer. Nikita Jain, spouse associated with the assessee. It had been further held by the AO that Smt. Nikita Jain, spouse of this assessee, is having her PAN and filing her return of income which can be additionally examined to income tax, consequently, depending on tax conditions, spouse and spouse both could not be thought to be single entity and also the advantageous asset of investment created by a person assessee is not directed at another specific assessee. The AO further drawn mention of the provisions of Section 54F for the Act and held that to claim deduction, the investment in brand brand new asset must be into the name of assessee himself. It had been further held by the AO that in lack of the non-public stability sheet for the assessee and lack of appropriate documentary evidence, it is not ascertained whether assessee will not obtain more than one residential household, aside from brand brand new asset, in the date of transfer of this asset that is original. Properly, of these two reasons, the claim regarding the assessee u/s 54F for the I.T.Act, 1961 had been disallowed.

Being aggrieved, the assessee carried the situation in appeal prior to the ld CIT(A) and submitted that the purchase of a new domestic home has to be purchased because of the assessee.

Nevertheless, it is really not specifically needed underneath the legislation that your house ought to be bought within the title of assessee just. It was further contended that liberal construction must be fond of conditions of section 54F of the Act if substantive requirement are satisfied, advantage issued by the Parliament shouldn’t be recinded for small and unimportant inconsistencies. Further, the assessee put reliance in the choice of Honorable Delhi tall Court in the event of CIT vs. Kamal Wahal (351 ITR 4), wherein, into the context of section 54F for the Act and get of home when you look at the name of assessee’s spouse, it absolutely was held that the latest house that is residential not be bought because of the assessee inside the title neither is it necessary so it should really be bought and exclusively in their title. Further, reliance had been put on your choice of Honorable Madras tall Court in the event of CIT vs. V. Natarajan (287 ITR 271) where in fact the homely home ended up being bought into the title for the assessee’s spouse, deduction under section 54 ended up being permitted. Further, reliance had been positioned on your choice of Hon’ble Andhra Pradesh tall Court in case of belated Gulam Ali Khan vs. CIT (165 ITR 228) wherein into the context of area 54 of this Act, it had been held that the term ‘assessee’ should be offered an extensive and liberal interpretation therefore as to incorporate their appropriate heirs also. Further, reliance ended up being positioned on the decision of Honorable Karnataka tall Court into the full instance of DIT vs. Mrs. Jennifer Bhide (349 ITR 80) wherein it had been held that in which the consideration that is entire flown from her spouse, simply because either in the purchase deed or within the bond, her husband’s title can also be mentioned, the assessee can’t be denied the main benefit of deduction u/s 54 and 54EC regarding the Act. Further, reliance had been put on your decision of Honorable Delhi tall Court in the event of CIT vs. Ravinder Kumar Arora (342 ITR 38) asian dating site wherein into the context of section 54F for the Act, it had been held that in which the assessee has included the name of their spouse therefore the property was bought jointly into the names, it could maybe not make a difference while the conditions stipulated in section stand that is 54F.

The ld. CIT(A) however relied from the choice of Honorable Rajasthan tall Court in the event of Kalya vs. CIT (251 CTR 174) wherein when you look at the context of section 54B regarding the Act, it had been held that the assessee wouldn’t be eligible to get exemption for land purchase by him into the true name of his son and daughter-in-law. Further when you look at the said choice, it absolutely was held that the word ‘assessee’ utilized in the IT Act has to be offered a ‘legal interpretation’ and not just a ‘liberal interpretation, because it would tantamount to providing a totally free hand to your assessee along with his legal heirs and it also shall curtail the revenue associated with national, that the law will not allow. After the choice of Honorable Rajasthan tall Court in case of Kalya, the ld. CIT(A) upheld the rejection of claim of this assessee u/s 54F of this Act.

The ld during the course of hearing. AR reiterated the submissions created before the ld. CIT(A). Further, ld. AR also drawn our mention of the the decision that is recent of Rajasthan tall Court in the event of Sh. Mahadev Balai vs. ITO (D.B. ITA No. 136/2017 & others 07.11.2017 that is dated wherein when you look at the context of section 54B, it had been held that where in actuality the investment is manufactured within the name associated with the wife, the assessee will be qualified to receive claim of deduction u/s 54B of the Act.

The assessee has sold agricultural land and purchased another agricultural land in the name of his wife and claimed deduction u/s 54B of the Act in the said case. The Bench that is co-ordinate vide order in ITA No. 333/JP/2016 dated 26.12.2016 after the decision of Honorable Rajasthan tall Court in the event of Kalya vs. CIT(supra) had determined the matter up against the assessee and it has verified the denial of deduction u/s 54B of the Act. When you look at the context of said facts, on appeal by the assessee, the Hon’ble Rajasthan tall Court has framed the next substantial concern of legislation:

“Where ld. ITAT ended up being justified in disallowing the exemption u/s 54B o f the Act without appreciating that the funds used for the investment to buy associated with home eligible u/s 54B belonged towards the appellant just and just the document that is registered performed within the title o f the spouse and additional the wife had not split revenue stream.”

The Honorable Rajasthan tall Court, after considering its early in the day choice in the event of Kalya vs. CIT(supra) additionally the several other choices of Honorable Delhi High Court, Honorable Madras tall Court, Honorable Karnataka tall Court, Honorable Punjab and Haryana tall Court, and Honorable Andhra Pradesh High Court, as additionally relied upon by the assessee, has held it is not specified in the legislation that the investment is to be in the name of the assessee and where the investment is made in the name of wife, the assessee shall be eligible for deduction and has thus decided the matter in favour of the assessee that it is the assessee who has to invest and. The appropriate findings associated with Honorable Rajasthan tall Court are included at para 7.2 and 7.3 of the purchase that are reproduced as under:-

on a lawn of investment created by the assessee into the title of their wife, in view regarding the choice of Delhi High Court in Sunbeam car Ltd. along with other judgments of various High Courts, your message utilized is assessee has got to spend, it isn’t specified that it’s to stay the title o f assessee.