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आदेश/Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order of the ld. Commissioner of income Tax (Appeals)-43, New Delhi [in short ‘the ld. CIT(A)] dated 06.07.2018 pertaining to 2013-14 assessment year.
The sole issue involved in this appeal is as to whether the assessee is eligible to claim deduction u/s 54 of the Income Tax Act, 1961 in respect of the house purchased in ITA No.1308/CHD/2018 A.Y. 2013-14 2 joint name alongwith his wife.
The brief facts of the case are that the assessee sold a residential house in India for a sum of Rs.5.75 Cr on 07.01.2013. The assessee invested the sale consideration received for purchase of a residential house at New Zealand.
The assessee claimed deduction u/s 54 of the Income Tax Act, 1961 (in short ‘the Act’) in respect of the capital gains earned on the sale of the residential house in India. The Assessing Officer (in short ‘the AO’), however, denied the claim of deduction u/s 54 of the Act on two grounds ; i) The new residential house was not purchased in India ii) The house in question was purchased by the assessee in joint name with his wife
Being aggrieved, the assessee preferred appeal before the ld. CIT(A). So far as denial of claim on the ground that the house was not purchased in India, the ld. CIT(A) decided the issue in favour of the assessee by holding that prior to the amendment to Section 54 of the Income Tax Act, 1961 brought vide Finance (No. 2) Act, 2014 w.e.f. 01.04.2015, there was no such condition of purchasing of the new house in India only to claim deduction u/s 54 of the Income Tax Act, 1961. In respect of the issue of purchase of new residential house in joint name with wife, the ld. CIT(A) held
ITA No.1308/CHD/2018 A.Y. 2013-14 3 that the assessee is entitled to 50% of the claim of deduction to the extent the share of the assessee in the newly purchased house. He denied the deduction qua the share of the wife of the assessee in the residential house purchased.
Being aggrieved by the said order of the ld. CI T(A), both the Revenue as well as the assessee preferred appeals before the Tribunal. The Revenue in its appeal assailed the order of the ld. CIT(A) in respect of his finding that there was no such condition prior to 01.04.2015 for purchase of residential house in India only. The said appeal of the Revenue was dismissed by the Tribunal vide order dated 26.10.2021 in ITA No.1245/CHD/2018. The Revenue further preferred the appeal against the order of the ld. CI T(A) before the Hon'ble High Court. However, the Hon'ble High Court has also decided the issue in favour of the assessee as the said appeal of the Revenue also stands dismissed by the Hon'ble High Court vide order dated 9 t h May, 2024 in ITA 59- 2023 (O&M).
Now the only issue in the present appeal of the assessee is as to whether the assessee is entitled to deduction @ 100% or the deduction claimed by the assessee is to be restricted @ 50%. We find that the issue is squarely covered by the various decisions of Hon'ble High Courts including
ITA No.1308/CHD/2018 A.Y. 2013-14 4 that of the jurisdictional Hon'ble Punjab & Haryana High Court in the case of CIT Vs Gurnam Singh, IT Appeal No. 616 of 2007 vide order dated 01.04.2008, reported in (2008) 76 CCH 472 (P&H) : (2008) 170 Taxman 0160 wherein, the Hon'ble High Court, in respect of identical claim of deduction u/s 54B of the Act, has held that the deduction u/s 54B could not be denied merely because the land was purchased in joint name of assessee and his only son who was bachelor and dependent upon him. Similarly, the Hon'ble Delhi High Court in the case of CIT Vs Kamal Wahal ITA 4/2013 vide order dated 11.01.2013 reported in (2013)
84 CCH 0024 (Del HC) : (2013) 214 Taxman 0287, in respect of claim of deduction u/s 54F of the Act has held that where the new house was purchased in the name of the wife of the assessee and it was established that the purchase consideration was invested out of the property sold by the assessee, the deduction cannot be denied u/s 54F of the Act.
In the case in hand also, there is no rebuttal to the contention that the assessee has invested the consideration received on the sale of the house in India for purchase of new house in New Zealand, however, in joint name with his wife. The issue is squarely covered by the aforesaid decisions of the Hon'ble Punjab & Haryana High Court in the case of “CIT Vs Gurnam Singh” (supra) and of the Hon'ble
ITA No.1308/CHD/2018 A.Y. 2013-14 5 Delhi High Court in the case of “CIT Vs Kamal Wahal”
(supra). The refore, respectfully following the orders of the Hon'ble Delhi High Court and Hon'ble Punjab & Haryana High Court (supra), it is held that the assessee is entitled to 100% of the deduction claimed u/s 54 of the Income Tax Act.
Accordingly, the appeal of the assessee stands allowed.
In the result, appeal of the assessee stands allowed.
Order pronounced on 19 t h July,2024.