09 November 2009
I HAVE PURCHASE A RESIDENTIAL PROPERTY ON A YEAR OF 2004 AND I WOULD LIKE TO SELL OUT MY THIS PROPERTY AS ON THIS MONTH 2009. AND ALSO I WOULD LIKELY TO PURCHASE OF MY NEW RESIDENTIAL PROPERTY IN MY JOINT NAME. IN FIRST NAME OF MY MAJOR SON AND SECOND OF ME. SO MY QUESTION IS THAT SHOULD I HAVE CLAIM EXEMPTION U/S. 54.
I belive you can register new Res Property in joint name and it nowhere affect amount of exemption under section 54 of IT Act.
Your intentions and my belief can be supported by following case laws;
Balraj v. CIT [2002] 123 Taxman 290/254 ITR 22 (Delhi)
Purchase’ does not mean that the new house must be registered in assessee’s name - For the purpose of attracting the provisions of section 54, it is not necessary that the assessee should become the owner of the property purchased. The word ‘purchase’ occurring in section 54(1) has to be given its common meaning, viz., buy for a price or equivalent of price by payment in kind or adjustment towards a debt or for other monetary consideration. Therefore, for the purpose of applicability of section 54, registration of the document is not imperative -
CIT v. Chandanben Maganlal [2000] 245 ITR 182 (Guj.).
Exemption is allowable even if a share in new property is purchased - When the Act enables an assessee to get exemption from payment of tax in respect of purchase or construction of a residential house, purchase or construction of a portion of the house should also enable the assessee to claim the exemption. It is possible that a person may not be in a position to purchase the whole residential house at a time and in the circumstances an assessee might purchase a portion of the house or some interest in the house. Thus, where the assessee sold a house and from the sale proceeds purchased 15 per cent undivided share in a house property from her husband and her son, and she was earlier residing in that house, exemption under section 54 can be allowed -
10 November 2009
THANKS JUZER YOU HAVE SLOVED MY QUERY BUT I WAS ALSO DOUBT ABOUT THAT ABOVE CASES THAT ASSESSEE HAS CLAIM FULL AMOUNT OF NEW PROPERTY IN U/S. 54 OR PORTION OF HIS SHARE FOR CLAIMING AMOUNT OF U/S. 54.
10 November 2009
Both the citations are distinguishable. The 1st case cited is about ownership pending registration and not investing in the name of a person other than the assessee. The 2nd citation is reinvesting in a portion of the house in assessee's own name and not investing in other persons name.
I want to know if person sell preperty then invest in another property by borrowings from finacial instt thn he can claim exemption u/s 54. or not?????
CAclubindia
