Capital Gains on sale of Flat - query

[pr50]

1.   My wife and I booked an under construction flat in Sep 2015 – with first name of my wife, and myself as co-applicant.
2.   The initial amount paid to the builder was Rs 50 L. The amounts were paid as follows: 25 L from my wife's account, and 25 L from a joint account, where my name is 1st  holder, and my wife's name 2nd  holder.  The receipts for the entire amount of 50 L, from the builder, are in my wife's name. (The 25 L paid from the joint account was considered as a loan from me to her, which she has repaid to me July 16)
3.   In July 16, my wife sold a flat she owned, the CG from which works out to Rs 80 L. 
4.   Question:   

Since the CG earned by my wife should be reinvested in residential property, would it be correct to treat 50 L, as having already been invested, and only the remaining 30 L still to be invested before July 18?
Or would the IT authorities treat only 25 L as having been invested by my wife, leaving a balance of 55 L still to be put in, in order to avail of the CG exemption available? 
(A related point is, in a joint account of a husband and wife, does the money belong only to the 1st holder of the account, or does the 2nd holder also own this?).

Appreciate your advise, as based on this we would need to take a decision about how much money to deposit in the CG account.     

[satyanveshi]

your question can be viewed two angles....
1.. Since funds are not from the sale proceeds of the flat sold by your wife, you have a apprehension that whether 54F would be allowed by AO or not.

suppose, your wife has taken a loan from you of Rs. 25 lakhs and pay Rs. 50 lakhs to the builder then whether AO can disallow it. the answer is a big no.  why because, the courts have held that the same money received out of sale consideration need not be invested in new house to get deduction u/s 54/54F.. What is relevant is whether the new house is in her name or not... So far, the new house is in her name, no problem, even if AO didnot allow it, I am sure, you will ultimately win the case ... please see the case laws in the case of PS pasricha ( reported in this website) and 206 taxman 150 and finally 382 ITR 56....

2. If the entire sale consideration is paid by your wife from the sale proceeds of the house , though the house is registered in the name of yourself as well as your wife .... then also your wife will get dedcution. this issue has also been set at rest by somany high courts in the decisions reported in 351 ITR 4, 342 ITR 38, 349 ITR 80,  327 ITR 278... There may be so many case laws....

In view of the above, you may purchse the new house in the name of your wife and proceed to claim the deduction.  But dont forget to deposit the proceeds in the joint account from which the amount of Rs. 25 lakhs has been paid  after the sale consideration is received.. Dont worry at all .... go ahead..

[pr50]

Dear Mr. Satyanveshi... Thank you very much for your very clear and detailed reply. Much appreciated.