May 2012
Capital gains: Exemption u/s.54F of Incometax Act, 1961: A.Y. 2007-08: Purchase of residential house in joint names of assessee and his wife: Wife had not contributed: Assessee entitled to exemption u/s.54F to the full extent.
By K. B. Bhujle, Advocate
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[CIT v. Ravindra Kumar Arora, 342 ITR 38 (Del.)]
The assessee sold a land being a long-term capital asset and invested the sale proceeds in a residential house which was purchased in the joint name of the assessee and his wife. His wife had not made any contribution. The assessee’s claim for deduction u/s.54F of the Income-tax Act, 1961 was rejected by the Assessing Officer on the ground that the house had been purchased in the joint names of the assessee and his wife. The Tribunal allowed the assessee’s claim.
On appeal by the Revenue, the Delhi High Court upheld the decision of the Tribunal and held as under: “
(i) Section 54F of the Income-tax Act, 1961, is a beneficial provision which should be interpreted liberally in favour of the exemption/deduction to the taxpayer and deduction should not be denied on a hyper-technical ground.
(ii) The condition stipulated in section 54F stood fulfilled. It would be treated as the property purchased by the assessee in his name and merely because he had included the name of his wife and the property purchased in the joint names would not make any difference. The assessee was entitled to exemption u/s.54F.”
