12 January 2014
Dear Sirs, Assessee sold original asset u/s 54F and transfers sales consideration to his wife's account. An under construction residential flat is booked in their joint names but payment of instalments to the builder is made from the wife's bank account.Now my questions are as follows;-
1)From which accounting year will the flat be shown as an asset in balancesheet-year of booking or year of possession? If the answer to this question is year of booking then what amount will be shown as asset-the full sale value or the total amount paid as instalment till 31stmarch of that accounting year? 2)In whose balancesheet ,assessee's or his wife's the new property will be shown as an asset so that section 54 F exemption may be successfully claimed without any problems or hitches. OR should 50% sale value be shown as an asset in both assesse's and his wife's balancesheet?
12 January 2014
What is the income of the wife is to be seen. Marley as the sale proceed was transferred to the wife's account does not make your wife to claim the benefit. If still you continue and show the same as gift from husband then first of all provisions of Section 64 will come into play and will be clubbed with the husband. On the other hand husband may be denied of the deduction u/s 54F.
To claim the deduction u/s 54F you have to fullfill the provisions of section 54F(4) and then the same should be claimed in the hands of the husband.
As regards showing in the balance sheet the same is to be shown in the hands of the husband and the amount paid is to be capitalised from the year in which which payment has been made.
Since I have already stated that wife has not sold anything and she does not have any source of income you cannot show then equal partners.
12 January 2014
Respected Sir, So you do not concur with the decisions of various high courts in recent years giving a liberal interpretation of sec 54 and sec 54F holding that even if the new asset is purchased in the name of spouse of the assesse claiming exemption u/s 54 or 54F, the revenue dept would not deny the exemption? Thanks in advance
CAclubindia
