INCOME TAX ACT, 1961

Section 54F

Capital gains - Deduction under section 54F - Purchase of new residential property in name of assessee's son - Violations made by assessee's son with respect to terms of loan agreement entered with bank for purchase of new property

Assessee sought deduction under section 54F claiming that sale proceeds were utilized for purchase of new residential property in name of his son and said new asset was also purchased within due date of filing of the return. AO disallowed deduction on allegation that bank loan obtained by assessee's son from bank did not appear to be source for purchase of new residential house by assessee's son. Held: Violations made by assessee's son with respect to terms of loan agreement entered with bank towards purchase of the residential house was of no relevance as far as Income Tax Act was concerned for granting deduction under section 54. Penal action against such violation, if any, was to be initiated by bank, as per Banking Regulations Act or as per terms of agreement between them, and not by Revenue. Assessee did not violate any of provisions mentioned in section 54F in order to be denied benefit of deduction.

Followed:CIT v. Kamal Wahal (2013) 351 ITR 4 (Del) : 2013 TaxPub(DT) 1087 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 254 Rule 34(5)

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