In Male Dominating Society, Wife To Get Tax Exemption Even If Investment Made In Joint Name Of Husband: ITAT [Read Order]

“In a male dominating society, investment made in the name of the husband is also to be considered as investment” and the assessee wife can claim exemption from tax liability under Section 54F of the  Income Tax Act, the Chennai bench of Income Tax Appellate Tribunal has said.

The Tribunal said the assessee is eligible for exemption under Section 54F of the Act even though the investment was said to be made in the joint name of assessee and her husband as “under the common law, assessee and her husband are one and same. Therefore, when the investment was made in the name of the assessee and her husband, it has to be considered that investment was made by the assessee”.

The bench of Judicial Member NRS Ganesan and Accountant Member A Mohan Alankamony said so while considering the issue of investment of sale proceeds in the name of the assessee and her husband.

In the appeal before the tribunal, the Assessing Officer had disallowed the claim of the assessee under Section 54F of the Act on the ground that the assessee’s husband was not having any share in the property sold by the assessee. Since the investment was made in the name of the assessee and her husband, the Assessing Officer restricted the investment to the extent 50 per cent.

The bench, however, set aside the order and directed the assessing officer to grant an exemption to the assessee under Section 54F.

In so ordering, the bench said, “…while adjudicating the issue arises for consideration, the prevailing customary practice in the society cannot be ignored by the judicial authorities. Therefore, even though the property sold stands in the name of assessee alone and the investment was admittedly made in the name of assessee and her husband, this Tribunal is of the considered opinion that the object of enactment to promote housing facility in the country is achieved and the assessee’s husband cannot be considered as a third party as far as the assessee’s investment is concerned”.