In a recent ruling, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the husband shall be eligible for a capital gain exemption if he invests the entire long term capital gain towards the investment in another property in the name of the wife.
The assessee, while filing the income tax return for the relevant year, disclosed that the assessee sold two properties and made an investment in one property and claimed exemption of long term capital gains under section 54F of the Income Tax Act, 1961. The property was invested in another property purchased in his wife’s name. It was claimed by the assessee during the assessment proceedings that he has fulfilled all the technical conditions for exemption of long term capital gains under sections 54/54F of the Income Tax Act. However, the Assessing Officer denied the exemption.
In a similar ruling, the Delhi High Court had held that since it is a beneficial provision, therefore, the benefit should be allowed to the assessee.
On the second appeal, the Tribunal relied on the above decision of the Delhi High Court and held that since the entire sale amount of long term capital gain has been invested in purchase of other property in the name of the wife of the assessee, the assessee would be entitled to exemption on account of long term capital gains. In this view of the matter, we set aside the Orders of the authorities below and delete the entire addition. The A.O. is directed to allow exemption of assessee.
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