Sec. 54 investment query - ltcg on house property

CA. Abhishek K. Pandey (Manager (Advance)) (901 Points)

29 June 2013  
Hello all. This is a query in regard to investment u/s 54. The case is that Mr. X transferred a House Property to his spouse a few years ago. Now, Mrs. X sold that house and this results in LTCG. Now, as per sec. 27 and clubbing provisions, this LTCG should be of Mr. X. So, if they want to save tax, then investments u/s 54 should be done by whom?? Mr. X - the deemed owner u/s 27 or Mrs. X - assessee, who sold the house. In my opinion, it should be by Mr.x, but just want to confirm. Also, if Mrs. X has to do this - Can MR. X take a loan of requisite amount and deposit it for MRS. X as per sec. 54. Regards.