MOHAMMED NAZIR KUNJI MOIDEEN,THRISSUR V. ITO, INTERNATIONAL TAX WARD, KOCHI

ITITA 1/COCH/2025

AI Insights

The case revolves around the dispute concerning the deduction under section 54F of the Income Tax Act, 1961, for the assessment year 2015-2016. The assessee, Mohammed Nazir Kunji Moideen, argued that he was entitled to a full deduction for the investments made in a new property, which was registered jointly in his and his wife's names. The Revenue contended that the deduction should be limited to 50% since the property was jointly owned. The tribunal referenced a precedent where it was established that the deduction under section 54F is applicable to the assessee who invests the funds, regardless of the property ownership's name. The matter was remanded back to the AO to verify if the assessee's wife had claimed any deduction under section 54F.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396723 (ITAT-COCHIN)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 30-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Other Referred Cases: CIT Vs. Natarajan
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNDARASAN S
• Assessee Lawyers: BABU KARUKAPADATH
• Keywords: Source of fund
• Section: 54F

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member IT(IT)A No.1/Coch/2025 : Asst.Year 2015-2016 Mohammed Nazir Kunji Moideen, 1 Metro Medicals KBEES Complex Kodungallur Thrissur – 680 664. PAN : ACHPM4134C. v. The Income Tax Officer International Taxation Kochi. (Appellant) (Respondent) Appellant by : Sri.Babu Karukapadath, Advocate Respondent by : Sri.Sundarasan S, CIT-DR Date of Hearing : 27.05.2025. Date of Pronouncement : 30.05.2025 O R D E R Per Prakash Chand Yadav, JM : The present appeal of the assessee is arising from the order of the Assessing Officer dated 22nd November, 2024 and relates to the assessment year 2015-2016. 2. At the outset, the short controversy involved in this appeal is the deduction of sec.54F of the Act. It is the case of the assessee that he is entitled for the deduction u/s.54F on the entire investments made by him and it is the case of the Revenue that the assessee is entitled for 50% of the deduction u/s.54 F as the assessee has purchased the new property jointly in the name of the assessee and his wife. IT(IT)A No.1/Coch/2025. Mohammed Nazir Kunji Moideen. 2 3. The learned Counsel for the assessee at the outset argued that merely because the registration of the property has been executed in the name of the assessee as well as in the name of the wife that cannot be a ground for denying of deduction u/s.54 of the Act. The lower authorities ought to have appreciated that the source of funds are emanating from the bank account of the assessee and not from the accounts of the wife. 4. The learned DR relied upon the orders of the authorities below. 5. After considering the rival submissions, we are of the view that the contention of the assessee is justifiable inasmuch as it is settled position of law that sec.54F deduction is to be granted to an assessee, who invested the funds in the property, irrespective of the fact that the ownership of the property is in the name of assessee and his wife. When the bench has asked the assessee as to whether the wife of the assessee has claimed any deduction u/s.54F, the Counsel for the assessee denied. A reference can be made to the judgment of Hon’ble CIT Vs. Natarajan [(2007) 287 ITR 271 (Mad)] wherein it was held that the assessee has purchased a property in the name of his wife, the Hon'ble Court held that the assessee will be eligible for exemption u/s. 54F of the Act. 6. The learned CIT-DR prayed that for examining this factual aspect, the matter may kindly be restored to the file of the AO. IT(IT)A No.1/Coch/2025. Mohammed Nazir Kunji Moideen. 3 7. Therefore, we restore this issue to the file of the AO for examining as to whether the wife of the assessee has claimed any deduction u/s.54F and in case the wife of the assessee has not claimed any deduction, then full deduction of 100% to be given to the assessee. 8. Since we have already adjudicated the matter on merits, we deem it proper not to deal with respect to the issue of jurisdiction u/s.148 of the Act. 9. In the result, the appeal filed by the assessee is allowed as indicated above. Order pronounced on this 30th day of May, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 30th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "