Capital gains

This query is : Resolved

P.karthik (Querist)
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09 August 2011
Dear Sir,

An Assessee being a Son ( NRI) having a Property in his Name and appointed his Mother as POA holder.

During 2010-11 his mother sold the Property and Purchased another Property to claim exemption u/S.54 of Income Tax Act.

Before Purchasing the above mentioned Property The Son has given POA to his Father for Purchasing the New Property and the Father had registered the Property in his Own Name ( POA of Son).

Now my Query is Shall the Son can claim deduction u/s.54 even if the Property is registered in his father's Name(POA Agent of Son)for the F.Y.2010-11.

Highlight Relevant Sections/Cases in this regard.

U S Sharma

U S Sharma (Expert)
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09 August 2011 ‘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 - Balraj v. CIT [2002] 123 Taxman 290/254 ITR 22 (Delhi).

http://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2005ITAct/casesec54.htm