Claim of deduction under section 54 cannot be denied merely on the ground that the new residential property was purchased in the name of the assessee’s wife, although the entire investment was made from assessee’s own funds.

65. (2025) 179 taxmann.com 262 (Ahd Trib)

Rajesh Narendrabhai Patel vs. ITO

A.Y.: 2012-13 Date of Order: 09.10.2025

Section : 54

Claim of deduction under section 54 cannot be denied merely on the ground that the new residential property was purchased in the name of the assessee's wife, although the entire investment was made from assessee's own funds.

FACTS

The assessee was an individual. During the relevant year, he sold immovable property situated at Vadodara for a sale consideration of ₹90,00,000. The case was reopened under section 147. In response, the assessee filed return of income declaring capital gains at NIL. During the reassessment proceedings, on the basis of the report of DVO, the capital gain was recomputed to ₹62,60,142 against which the assessee claimed exemption under section 54 of ₹53,78,500 for investment in purchase of a residential property. However, the AO disallowed the claim of exemption under section 54 on the ground that the property was not purchased in his own name but in the name of his wife.

Aggrieved, the assessee went in appeal before CIT(A). While the