LATE SH. PREM SINGH THROUGH LEGAL HEIR SH. RAJ KUMAR,KARNAL vs. ITO, KARNAL

The only issue raised in this appeal is against the denial of deduction u/s 54B for the purchase of new property by the transferor in the name of his wife, Smt. Kanta Devi.

Briefly stated, the facts of the case are that the assessee sold certain land on which long term capital gain was earned.

I have heard the parties and perused the relevant material on record. There is no dispute that the new property was purchased by the assessee in the name of his wife Smt. Kanta Devi. It is observed that there is a cleavage of opinion amongst the Hon’ble High Courts on the question of grant of benefit u/s 54B etc. when new property is purchased by the transferor in his own name with another or exclusively in the name of another. Whereas the Hon’ble Punjab & Haryana High Court in CIT vs. Dinesh Verma (2015) 233 Taxmann 409 (P&H) has held that the benefit of deduction cannot be allowed when a new property is purchased in the name of wife, the Hon’ble Delhi High Court in CIT vs. Kamal Wahal (2013)351 ITR 4 (Del), has held that deduction u/s 54F cannot be denied if the property is not purchased in own name. Since the assessee falls within the jurisdiction of the Hon’ble Punjab & Haryana High Court, respectfully following the precedent in Dinesh Verma (supra), I hold that the assessee was not right in claiming the benefit of section 54B in purchasing new property in the name of his wife. The impugned order is upheld to this extent.

Both the sides are in agreement that the facts and circumstances of this appeal are, mutatis mutandis, similar to the earlier appeal. In fact, no separate submissions were advanced by the either side. Following the view taken hereinabove, I uphold the impugned order to the extent of denial of the benefit u/s 54B.

In the result, both the appeals are dismissed.