The Delhi bench of Income Tax Appellate Tribunal ( ITAT ) ruled that capital gain deduction should not be denied even if new property purchased in the name of spouse.
The assessee Simran Bagga, is a non-resident individual residing in the United Arab Emirates. For A.Y. 2020-21, the Assessee filed a revised return of income by claiming capital gain deduction. During the assessment proceedings, the Assessee furnished all the details of investment made in the new residential house.
However the Assessing Officer disallowed the claim of deduction under Section 54 of the Income Tax Act amounting to Rs.93,46,404/- alleging that the residential property is registered in the name of the spouse of the Assessee, i.e., Mr. Ajay Suri, and not in the name of the Assessee.
Aggrieved, the assessee filed appeal before the CIT(A). Who disallowed the appeal. Hence the assessee filed another appeal.
When the matter was presented before the tribunal Assessee representative, Anshul Kumar argued that Capital Gains have been fully invested in acquisition of the property. The registry of the plot for the new property was completed on 12th January 2021, when strict international travel restrictions were in place due to Covid 19. Therefore, the Assessee could not travel to India and the registry was completed in the name of Mr. Ajay Suri, spouse of assessee.
Vizay B. Vasanta, the Department representative argued that since the property is not registered in the name o f the assessee but in the name o f her spouse, the deduction from the capital gain is not allowable.
The tribunal during the adjudication observed that Assessee was in UAE at the time of registration whereas Mr. Ajay Suri, spouse o f the Assessee was in India. The registry o f the plot for the new property was completed on 12 January 2021, when strict international travel restrictions were in place due to Covid 19. Therefore, the Assessee could not travel to India and the registry was completed in the name of Mr. A jay Suri for the sake of convenience.
Therefore the two-member bench Of Dr. B. R. R. Kumar, ( Accountant member ) and Saktijit Dey, ( Vice President ) relied upon the decision of Delhi High Court in the cases of CIT vs. Kamal Wahal observed that a new house purchased in the name of the spouse of the assessee was eligible for claiming deduction under section 54F of the Income Tax Act.
Accordingly the bench allowed the appeal filed by the revenue.
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