Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Cap Gain Exemptions

Hemant Uttwani (Article Assiatant) (25 Points)

04 March 2018

When a house is sold and the return so received is reinvested in a home with following all conditions as required by act but, if the new home is in the name of wife due to some rituals needed to be followed and wife is senior citizen house wife and non earning. Is the exemption still available on cap gain for the assessee as it is written in the law that amount received on sale of home should be reinvested in a new home construction or purchase and not mentioned that on whose name it should be taken. but not over strecthing the law as it is just in the name of a non earning senior citizen wife.

Reply
Follow
Share

5 Replies

RAJA P M ("Do the Right Thing...!!!") (127417 Points)
Replied 04 March 2018

Dear.,
As per my view it's not available... exemption available only to the Assessee not his wife...

Wait on Our Great experts view.

1 Like

Anmol Singla (808 Points)
Replied 04 March 2018

Dear Raja
I am not sure
but I read somewhere that exemption cannot be denied merely because property is purchased in wife name in case of capital gain
but I don't properly know

1 Like

Hemant Uttwani (Article Assiatant) (25 Points)
Replied 04 March 2018

thank you. I am also trying to find out as I read some cases which shown that purpose of law for expemptions was to encourage house constructions as well as as in this particular case as the wife is totally dependent and is senior citizen it gives a women empowerment as well. and I also noticed that law has nowehere written that assesse should register or purchase the new home in his own name and due to this There were some cases ehere supreme court allowed the stretching of law for genuine purpose but few cases were there like registration of new home in step son's name and a wife who is earning and a tax payee, such cases the decision went in favour of ITO and assessee was denied of exemption.

Meet Pratish Shah (Article Assistant) (49 Points)
Replied 04 March 2018

If the entire investment is from the consideration received from the house sold then exemption on capital gain can be claimed,
This is adjudicated in the case of CIT Vs. Ravinder Kumar Arora by Honourable Delhi High Court

1 Like

Hemant Uttwani (Article Assiatant) (25 Points)
Replied 04 March 2018

yes Mr Meet. I was trying to mention this case as well. yes the entire investment is from the consideration received from.the house and even remaining investment of 50k is from the NRE account of the assessee. so everything is fairly clear.