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Capital gain

Lakshay (None) (160 Points)

07 October 2016

Respected Sir One of my client has sold a residential property and invested the capital gain arising out of it in another residential property purchased in the name of his son. Now whether exemption of Capital Gain u/s 54 will be available to the father on the capital gain being invested..?

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10 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 07 October 2016

Father should be at least, co-owner in the new property, to claim exemption under section 54.

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Lakshay (None) (160 Points)
Replied 07 October 2016

Thnx for the reply sir but if the property is purchased in the name of wife instead of son, then whether the exemption will be available to the husband..??

sagar parakh (Group 2 Cleared) (317 Points)
Replied 07 October 2016

yes in the name of wife.. exemption can be claimed.

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sagar parakh (Group 2 Cleared) (317 Points)
Replied 07 October 2016

*refer case C.I.T vs Kamal wahal

CA Saba Naaz (Chartered Accountant) (8487 Points)
Replied 07 October 2016

What's more important is the contribution of assessee in

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CA Saba Naaz (Chartered Accountant) (8487 Points)
Replied 07 October 2016

What's more important is the contribution of assessee in the investment amount , to claim exemption.

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CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 07 October 2016

The Delhi High Court in its ruling in CIT vs Kamal Wahal, held that for the purposes of Section 54F, the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. It is moreover to be noted that the assessee in the present case has not purchased the new house in the name of a stranger or somebody who is unconnected with him. He has purchased it only in the name of his wife. There is also no dispute that the entire investment has come out of the sale proceeds and that there was no contribution from the assessee's wife.
So, assessee can take exemption u/s 54 if the new house property is invested in wife's name. Also there should not be any issue if house property is purchased in the name of son having regard to the rule of purposive construction and the object which Section 54/54F seeks to achieve fulfils here.

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