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CIT v. Ravindra Kumar Arora Judgement
Month-Year : May - 2012
Author/s : 342 ITR 38 (Del.) [BCAJ]
Title : CIT v. Ravindra Kumar Arora
Details :
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.”
Apropos second ground, brief facts are: The assessee was owner of the property standing in his name which was sold; qua capital gain exemption u/s 54f was claimed by the assessee as the sale proceeds of the property were utilized for purchasing another house in the name of assessee and his wife. Wife did not contribute any amount towards purchase. Thus new house was purchased by the assessee. The entire purchase amount was sourced by the assessee from the sale of house property. Rental income from the sold property was earlier offered in the hands of the assessee. Assessing Officer was of the view that exemption u/s 54 was allowable to assessee to the extent of one half of the purchase amount as one half belonged to wife. CIT(A) on the basis of evidence, remand report, facts and circumstances held that sec. 54 is applicable when the assessee has utilized the entire proceeds of its property in the purchase of a new house which is complied with. Reliance was placed on Hon’ble Madras High Court judgment in the case of CIT Vs. V. Natarajan 287 ITR 271 holding that even if the new house is purchased by the assessee in the name of his wife within a period of one year of receiving the sale proceeds, the exemption u/s 54 was eligible.
ITA No. 4063/Del/11 - A.Yr. 2004-05 ACIT, Cir. 43(1)Vs. Shri Ashok Alexander Apropos second ground, brief facts are: The assessee was owner of the property standing in his name which was sold; qua capital gain exemption u/s 54f was claimed by the assessee as the sale proceeds of the property were utilized for purchasing another house in the name of assessee and his wife. Wife did not contribute any amount towards purchase. Thus new house was purchased by the assessee. The entire purchase amount was sourced by the assessee from the sale of house property. Rental income from the sold property was earlier offered in the hands of the assessee. Assessing Officer was of the view that exemption u/s 54 was allowable to assessee to the extent of one half of the purchase amount as one half belonged to wife. CIT(A) on the basis of evidence, remand report, facts and circumstances held that sec. 54 is applicable when the assessee has utilized the entire proceeds of its property in the purchase of a new house which is complied with. Reliance was placed on Hon’ble Madras High Court judgment in the case of CIT Vs. V. Natarajan 287 ITR 271 holding that even if the new house is purchased by the assessee in the name of his wife within a period of one year of receiving the sale proceeds, the exemption u/s 54 was eligible.
can an assessee claim the benifits of both the Sec.54B & 54F simultaneously?
Is assessee entitled to claim the benefits of sec 54B & 54F simultaneously?
to claim exemption under section 54B, assessee needs to invest in agriculture land. Such agriculture land if sold within period of three years of its acquisition the amount of difference between sale value of this new agri land and its cost of purchase as reduced by amount of exemption claimed earier shall be charged as short term capital gain. I think upto this it is all well. Now my query is where the agriculture land is not considered as capital asset under section 2(14) of the act there will be no capital gain tax on sale of new agriculture land for which 54b exemption was claimed. is this true ??? so infact difference between sale value and reduced cost of acquition there can not be any capital gain if the new land falls under section 2(14).... is my contention right ?
Hello,
I recently sold a vacant plot and I am planning to invest that same to buy a farm house plot and construct a house on that plot within an year. So, can I claim exemption from capital gains? or is there any rule that states I wont be eligible for exemption since I am building a farm house. Please clarify.
Hello, I have an industrial unit under proprietary ownership allotted long time ago by KIADB (Karnataka Industrial board) and I want to sell and buy a residential property.
Am I allowed to claim capital gains under 54F?
Thank You
Hello,
I am in industrial unit under proprietary ownership and I want to sell it and buy a residential property. I do not have any residential property on my name now.
I am allowed to save tax under 54F?
Thanks
is exemption available if the capital gain is re-invested and the property is purchased in the name of son?
Is the exemption available if the capital gain is reinvested and property purchased in the name of son?
i have sale two site total sale consideration deposited to capital gain scheme within on year withdrwn that money site purchase and construction. in my wife name two residential property is their. i can claim exemption 54F.?
Dear sir, I had sale of two site full sale consideration amount deposited to capital gains scheme before filing the return. that amount utilise purchase of site and construction new house with in a period but my wife name two residential house is their. I can claim exemption 54F ?
A Farm house is also a 'house' so you will be eligible for exemption.
I am holding an Apartment registered in my name since more then 3 years and i sell it the gain will come under Long Term Capital Gain category, Now if i had bought an under construction apartment 6 months back and paid a few installment and will keep paying for may be 2-3 years or 4 years before the property come under possession/registry in my name.
Pls tell me by investing in such property whether i can claim exemption under Long Term Capital Gain tax law or not . If yes under which section and is there any case law to support me.
Yes! You can invest sale proceeds in new residential house in the name of your son. Hon'ble Calcatta HC held in the case of "CIT vs Ajit Kumar Roy 2001 170 CTR Cal 187" that new house can be purchased in the name of close relatives when entire fund flow come out from assessee's account.
Sir,
can we claim capital gain exemption u/s 54F:
1.Sale proceeds of urban agricultural land can it be invested in new house
2.Sale proceeds of urban agricultural land can it be invested partly in urban agricultural land and partly in new house
Dear Sir,
I have a query. I am selling a trust property whose beneficiaries are all the members of my family. And i am planning to buy a Leasehold property (Having 999 years Lease rights) out of the Gains from the sale of the property. I have two queries:
1. What is the income tax law for selling of trust property and beneficiaries getting the fund.
2. If i invest my share in a leasehold residential property would i be allowed to the capital gain exemption? Thank you in advance.
say
a builder converted his agriculture land into stock in trade and earned Rs. 1 crore as capital gain.
He constructed 10 units and sold 2 in the current year making him liable to pay tax on 20 lacs.
To avail exemption he planned and procured another agriculture land of Rs. 1 crore ( 20 lacs from the sale proceeds and 80 lacs on loan )
Will he be entitle to claim exemption on the loaned fund investment ??
Say
one builder converts his agriculture land to Stock in trade, gaining a Capital Gain of Rs. 1 Crore and constructs 10 units on it.
Out of that he sells 2 units in the current year and proportionately liable to pay tax on 20 lacs.
To avail exemption under 54B, he procured another agriculture land of Rs. 1 crore financed 20 lacs through sale proceed and remaing 8 lacs from loan funds.
will he be entitle to avail exemption on sum of Rs. 80 lacs
Please Discuss
Dear sir,
Would like to request for your suggestion,
I am purchasing a new house with my father on 25:75 basis .
25 is sourced by him from ltcg of his sold property and 75 by me from loan.
In that case, can my father claim full exemption on ltcg by purchasing new house.
Thanks
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