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Judgment
ORDER
This assessee’s appeal for assessment year 2016-17, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1086598125(1), dated 26.02.2026 involving proceedings under section 143(3) r.w.s. 263 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
Coming to the assessee’s sole substantive ground raised herein, a perusal of the case records indicate that both the learned lower authorities’ respective assessment and lower appellate discussion have added half of the assessee’s sales consideration amounting to Rs.12,19,279/- arising from the transfer of the relevant capital asset as assessable in his hands.
That being the case, there are few relevant facts which ought to be considered by the tribunal. This assessee’s admittedly owned/possessed the relevant capital asset i.e. residential H. No.76, situated in Dayal Singh Colony, Karnal for total consideration of Rs.77 lakhs to the extent of 1/3rd share. He thereafter, co-purchased yet another residential house, bearing, H. No. 258, Sector -13, Karnal, for Rs.45,66,000/- (the correct amount is Rs.39.66 lakhs) along with his wife Smt. Gita Juneja, which is further not in dispute in both the lower proceedings.
The Revenue’s case accordingly all along is that given the fact that section 54 deduction is allowable only qua the relevant capital gains investment in his own name, the remaining half share in the sale consideration ought to be disallowed for the purpose of reinstatement thereof in the assessee case.
It is in this factual backdrop that there arises the sole substantive issue between the parties as to whether the assessee is entitled for section 54 deduction qua the entire capital gains arising from the sale/transfer of the relevant capital asset or not. Learned departmental representative quotes CIT Vs. Dinesh Verma (2015) 60 taxmann.com 461 (P&H) that such a relief could be granted only in case of reinvestment of capital gains in the assessee’s own name than that in the joint name etc. The assessee, on the other hand, has placed on record this tribunal’s decision in ITA No.1308/Chd/2018, Sh. Manjit Singh Baidwan Vs. DCIT, decided on 19.07.2024, distinguishing the same, as under:
“6.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 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 Similarly, the was bachelor and dependent upon him. 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 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'bleΑ.Υ. 2013-14 Delhi High Court in the case of "CIT Vs Kamal Wahal" (supra). Therefore, 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. 7. In the result, appeal of the assessee stands allowed.”
Suffice to say, it has now come on record that such a joint reinvestment of capital gains could not be declined merely because it has been made in the name of assessee’s wife in the foregoing terms. The impugned disallowance/addition of Rs.12,19,279/-made in the assessee’s hands stands deleted therefore.
This assessee’s appeal is allowed.