ITAT allowed sec. 54 relief to woman who purchased new house jointly in name of married daughter & son-in-law

Capital gain exmption is an issue of litigation if the property is purchased in the name of another person either jointly or individually.

Here is an interesting case wherein the issue is decided in favour of the assessee.

The citation of the case is as under;

Short Overview of the case:

The issue is of exemption under Section 54 of the Income-tax Act, 1961 regarding Capital gains arising on sale of property used for residence vis a vis Ownership of new property.

The relevant Assessment year was  2015-16

Assessee sold a residential property for consideration of certain amount and invested entire amount on purchase of a new residential property in joint names of assessee with her daughter and son in law and that share of three co-owners was 34 per cent, 33 per cent and 33 per cent respectively

 Accordingly, assessee claimed exemption under section 54

Assessing Officer held that assessee was entitled for claim of exemption only to extent of her share in new residential property i.e. 34 per cent of total consideration invested by her

The issue before ITAT was as under;

Whether since assessee had invested entire sale consideration from sale of old residential property to purchase new residential property, assessee would be entitled to exemption of entire amount invested by her under section 54 even if new residential property was purchased in joint names of assessee, her daughter and son in law

 ITAT held it as  yes and decided the issue in favour of the assessee.

Conclusion :

Where assessee sold a residential property and invested entire sale consideration on purchase of a new residential property, assessee was entitled to exemption of entire amount invested by her under section 54 even if new residential property was purchased in joint names of assessee, her daughter and son in law.