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Late Kamal Kanta Uppal,Legal Heir Shri Chandra Kumar Uppal, E-97, Greater Kailash-III, New Delhi. Vs. ACIT,Circle-23(1),New Delhi.
September, 12th 2014
                DELHI BENCHES : D : NEW DELHI


                       ITA No.4632/Del/2010
                     Assessment Year : 2007-08

Late Kamal Kanta Uppal,           Vs.   ACIT,
Legal Heir Shri Chandra                 Circle-23(1),
Kumar Uppal,                            New Delhi.
E-97, Greater Kailash-III,
New Delhi.


     (Appellant)                           (Respondent)

              Assessee By     :    Shri Anil Bhalla, CA
              Department By   :    Dr. B.R.R. Kumar, Sr.DR



       This appeal by the assessee is directed against the order

passed by the CIT (A) on 30.08.2010 in relation to the assessment

year 2007-08.

2.     The only issue raised in this appeal is against the denial of

exemption u/s 54 to the extent of 50% of the amount invested in
                                                      ITA No.4632/Del/2010

the Gurgaon property purchased in the joint name of the assessee

as well as her son.

3.   Briefly stated, the facts of the case are that the assessee

sold a residential house property situated at New Friends Colony,

New Delhi for a consideration of ` 2.25 crore on which long-term

capital gain of ` 2.16 crore was shown. The assessee purchased

two properties ­ one at Gurgaon and the other at Masjid Moth,

New Delhi and claimed the benefit u/s 54 for a sum of ` 1.34 crore

on account of investment in these two properties. The assessee

also claimed relief u/s 54EC towards investment of ` 50 lac made

in REC Bonds. The AO held that exemption u/s 54 would be

allowed only in respect of one house property. That is how, the

property   purchased    at   Gurgaon   was   chosen    for    allowing

exemption u/s 54.      We want to make it clear here that the

assessee is not aggrieved against not allowing exemption u/s 54

in respect of investment in the other property at Masjid Moth,

New Delhi. The AO observed that the new property at Gurgaon

was registered in joint names of the assessee and her son Shri

Chandan Kumar Uppal. It was opined that the exemption u/s 54

would be admissible only for half of the amount invested in the
                                                    ITA No.4632/Del/2010

property because of the insertion of the name of her son as joint

purchaser.   That is how exemption u/s 54 was reduced to `

50,84,100/-, whereas the assessee had invested a sum of `

101,68,200/- in this property. The ld. CIT(A) upheld the action of

the AO in this regard. The assessee is aggrieved on this issue.

4.   We have heard the rival submissions and perused the

relevant material on record. The only issue pressed before us is

against the denial of exemption u/s 54 by 50% on account of the

name of the assessee's son also made as a joint purchaser. The

Hon'ble Delhi High Court in CIT vs. Shri Kamal Wahal [(2013) 351

ITR 4 (Del)] and CIT vs. Ravinder Kumar Arora [(2012) 343 ITR 38

(Del)] has held that when assessee makes payment for purchase

of new house, but, gets the same registered in joint name,

exemption u/s 54 is available on the entire amount invested. No

contrary judgment of the Hon'ble jurisdictional High Court has

been brought to our notice by the ld. DR. In view of the above

cited judgements, it is clear that if the assessee invests in new

house property from his own, but, such property is purchased in

joint names along with someone else, the exemption cannot be

proportionately denied to the extent of the inclusion of the name
                                                     ITA No.4632/Del/2010

of such other person. Adverting to the facts of the instant case, it

is seen that the assessee claimed to have made investment in

Gurgaon property out of the sale consideration received on the

transfer of house property at New Friends Colony, New Delhi. It is

not the case of the AO that Shri Chandan Kumar Uppal also made

contribution in the purchase of Gurgaon property. It, therefore,

emerges that the assessee made investment of ` 1.01 crore in

Gurgaon property from the sale proceeds realized from the

transfer of New Friends Colony property.       Going by the ratio

decidendi laid down by the Hon'ble jurisdictional High Court in the

afore-noted two judgments, we are of the considered opinion that

the claim of exemption u/s 54 cannot be restricted to half of the

amount invested in Gurgaon property. The assessee deserves and

is hereby allowed exemption for the full amount invested in

Gurgaon property. The impugned order is, therefore, overturned

to this extent.

                                                         ITA No.4632/Del/2010

5.        In the result, the appeal is allowed.

          The order pronounced in the open court on 11.09.2014.

                 Sd/-                                     Sd/-
       [A.T. VARKEY]                                  [R.S. SYAL]
     JUDICIAL MEMBER                              ACCOUNTANT MEMBER

Dated, 11th September, 2014.


Copy forwarded to:

     1.   Appellant
     2.   Respondent
     3.   CIT
     4.   CIT (A)
     5.   DR, ITAT

                                                   AR, ITAT, NEW DELHI.

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