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January 2013

Capital gain: Exemption u/ss. 54 and 54EC: A. Y. 2007-08: Long term capital gain: investment in residential property and bonds: Inclusion of husband’s name as joint owner: Assessee entitled to exemption of entire investment:

By K. B. Bhujle, Advocate
Reading Time 2 mins
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[DI(Int Tax) Vs Mrs. Jennifer Bhide; 349 ITR 80 (Kar):]

In A. Y. 2007-08, the assessee sold her residential property and from the sale proceeds, purchased residential property and bonds. The property and the bonds were purchased in the joint names of herself and her husband. The assessing Officer allowed 50% of the claim for deduction. The Tribunal allowed the full claim.

On appeal by the Revenue, the Karnataka High Court upheld the decision of the Tribunal and held as under:

“i) It was nobody’s case that the assessee’s husband had contributed any portion of the consideration for acquisition of the property or the bonds. The source for acquisition of the property and the bonds was the sale consideration.

ii) Once the sale consideration was utilised for the purpose mentioned u/s. 54 and 54EC, the assessee was entitled to the benefit of those provisions. As the entire consideration had flowed from the assessee and no consideration had flowed from her husband, merely because either in the sale deed or in the bond her husband’s name was also mentioned, in law he would not have any right. Therefore, the assessee could not be denied the benefit of deduction.”

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