The Delhi bench of the Income Tax Appellate Tribunal (ITAT) ruled that the capital gain exemption beneath section 54B of the Income Tax Act, 1961 could not claim the agricultural land purchased in the name of the taxpayers’ wife.
The taxpayer, Mr Karamvir, during the time of furnishing his return of income has claimed a deduction of Rs.65,15,210 beneath section 54B of the Income Tax Act, 1961.
The taxpayer has bought four properties from which two of the properties were bought dated 24 .01.2012 and 16.08.2012 amounting to Rs.35,83,277 and Rs.14,63,929 in the name of the wife of the taxpayer.
To the tribunal, the issue was that if the brought property by the taxpayer in the name of his wife would be eligible for the deduction u/s 54B or not.
A bench of Sh. Saktijit Dey, Judicial Member, and Dr B. R. R. Kumar, Accountant Member have revealed that the Hon’ble Karnataka High Court in the case of Antony Parakal Kurian Vs. ACIT 138 taxmann.com 440 held that the phrase ‘owns’ used by the proviso (a)(i) to section 54F(1) would also have a vital role.
What is related to the (ITR) taxpayer is that it must not have more than one residential house, additionally to the new asset, on the transfer date of the original asset.
The Hon’ble Court specified that section 54F has appreciated investment in the residential house. To get eligible for the exemption beneath section 54F, what is essential would be the investment to be done in a residential house in the taxpayer’s wife name only.
Maintaining the order of the first appellate authority, the bench sees that, securing the facts of the case the provision of the act, and the legal proposition we would not interrupt the decision of the ld.
CIT(A) that does not permit the claim of deduction u/s 54B towards agricultural land purchased on 24.01.2012 and on 16 .08.2012 amounting to Rs .35,83,277 and Rs.14,63,929.
