COMMISSIONER OF INCOME TAX Vs. RAVINDER KUMAR ARORA

JUDGEMENT

(1.) The sole issue raised in this appeal is that whether the exemption under Section 54F of the Income Tax Act, 1961 (hereinafter referred to as "the Act") is extendable to the assessee for the total consideration paid by him, for the purchase of the new asset (the residential property) in the joint name or the exemption would be limited to the extent of the share of the assessee in the said purchased property. This has arisen in the following circumstances:

(2.) The assessee's submission was considered by the AO. The AO noted that though all the payments were made by the assessee, the residential house was purchased jointly in the names of the assessee and his wife. The AO then referred to Section 54F of the Act only to the extent of his right in the new residential house purchased jointly with his wife. The AO, therefore, allowed 50% of the exemption claimed under Section 54F of the Act as against total claim of Rs. 3,18,59,276/- made by the assessee. The AO allowed claim only to the extent of Rs. 1,59,29,638/- and the balance 50% being Rs. 1,59,29,638/- was disallowed.

(3.) Aggrieved by that order, the assessee filed the appeal before the CIT (A), which was also dismissed. However, in further appeal before the Income Tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), the assessee has succeeded there as the Tribunal has held that the assessee is entitled for benefit of Section 54F of the Act with reference to the total investment of Rs. 3,28,15,000/-.