SH. MANJIT SINGH BAIDWAN,CHANDIGARH vs. DCIT, INTL. TAXATION, CIRCLE, CHANDIGARH
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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
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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.
Sd/- Sd/- ( KRINWANT SAHAY) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER
“Poonam” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकरआयु�त/ CIT 3. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 4. गाड�फाईल/ Guard File 5.
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar
