Purchase of New House in the name of Wife cannot disentitle Husband from Claiming Capital Gain Exemption: ITAT [Read Order]

The Jaipur bench of the ITAT recently ruled that the capital gain exemption under Section 54F of the Income Tax Act, 1961 cannot be denied to husband for the reason that the new house was purchased in the name of wife.

Coming to the facts of the case, the assessee did not disclose the transaction of sale of house. While completing assessment, the Assessing Officer made addition for the same on account of cash deposit made by the assessee in his joint account of with his wife. Assessees’ claim for deduction under section 54F was also denied on the ground that on the ground that the new house was purchase in the name of his wife.

The Tribunal bench relied on the latest decision in Laxmi Narayan vs. CIT, held that the benefit cannot be denied to the assessee, in the instant case.

Allowing the benefit of section 54F to the assessee, the bench held that “when the entire investment for the purchase of new house has gone through the assessee’s account then the benefit u/s 54 of the Income Tax Act cannot be denied on the ground the new house was purchased in the name of wife. Hence, the claim of the assessee u/s 54 of the Income Tax Act is allowed.”