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Income Tax Appellate Tribunal, DELHI BENCHES : SMC-I : NEW DELHI
Before: SHRI R.S. SYAL
ORDER This appeal by the assessee is directed against the order passed by the CIT(A) on 19.10.2016 in relation to the assessment year 2011-12.
The only issue pressed by the ld. AR is against the confirmation of addition of Rs.17,35,884/-.
Briefly stated, the facts of the case are that the assessee, a retired Government teacher earning pension, sold his property at F.No.40, Block D, Gujranwala CGHS Vikas Puri, New Delhi on 26.2.2011 for a consideration of Rs.27 lac and purchased a new property at WZ-195-A-1/First Floor, Gali No.4, Virendar Nagar, New Delhi-58 for a consideration of Rs.19,20,000/- on 5.3.2011 in the name of his wife Smt. Manjeet Kaur. Since the entire amount of capital gain was invested in the new property, the assessee claimed the benefit of deduction u/s 54. That is how, capital gain was returned at nil. The AO did not allow the benefit of section 54 on the premise that the new property was purchased in the name of his wife Smt. Manjeet Kaur.
This resulted into computation of net capital gain at Rs.17,35,884/-. The ld. CIT(A) confirmed the action of the AO. The assessee is aggrieved by the sustenance of addition.
Having considered the rival submissions and perused the relevant material on record, 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 54 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 jurisdictional 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 Delhi High Court, respectfully following the precedent in Kamal Wahal (supra), I hold that the assessee was right in claiming the benefit of section 54 in purchasing new property in the name of his wife. As the amount of capital gain is less than the amount invested in the new property, no 3 amount is chargeable to tax under the head ‘Capital gains.’ This ground is, therefore, allowed.
The other ground about initiation of re-assessment was not pressed by the ld. AR. The same is, therefore, dismissed.
In the result, the appeal is partly allowed.
The order pronounced in the open court on 23.02.2017.