Wife eligible for Tax Benefit for Investment made in the Joint name of Husband: ITAT [Read Order]

Wife and Husband Tax

“In a male dominating society, the investment made in the name of the husband is also to be considered as an investment.” – Income Tax Appellate Tribunal.

The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the tax benefit under section 54F of the Income-tax Act can be claimed by the wife for the investment made by her in the joint name of the husband. While delivering a ruling in favour of a woman-assessee, the Tribunal expressed a view that while adjudicating the issues, the authorities cannot ignore the ‘prevailing customary practice in the society.’

Assessee made an investment in property in the joint name of her husband. The Assessing Officer denied deduction under Section 54F of the Act on the ground that the assessee’s husband was not having any share in the property sold by the assessee and restricted the investment to the extent 50%.

The Tribunal observed that under the common law, assessee and her husband are one and same. Therefore, when the investment was made in the name of the assessee and her husband, it has to be considered that investment was made by the assessee.

Granting relief to the assessee, the Tribunal said that “In a male dominating society, the investment made in the name of the husband is also to be considered as an investment. While adjudicating the issue arises for consideration, the prevailing customary practice in the society cannot be ignored by the judicial authorities. Therefore, even though the property sold stands in the name of assessee alone and the investment was admittedly made in the name of assessee and her husband, this Tribunal is of the considered opinion that the object of enactment to promote housing facility in the country is achieved and the assessee’s husband cannot be considered as a third party as far as the assessee’s investment is concerned. Therefore, this Tribunal is of the considered opinion that the assessee is eligible for exemption under Section 54F of the Act even though the investment was said to be made in the joint name of the assessee and her husband. Therefore, we are unable to uphold the orders of the authorities below. Accordingly, the orders of both the authorities below are set aside and the Assessing Officer is directed to grant an exemption under Section 54F of the Act.”

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