TMI Blog2014 (6) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction of the new residential house must commence after sale of the original asset - The only condition imposed is that it is to be completed within three years from the date of sale of original asset – Relying upon Commissioner Of Income-Tax Versus JR. Subramanya Bhat [1986 (6) TMI 7 - KARNATAKA High Court] - the date of commencement of construction of the new property has preceded the date of sale of the asset giving rise to capital gains computed – there was no justification to interfere with the order of the CIT(A) on this aspect also – Decided against Revenue. - ITA No. 1762/Hyd/2012 - - - Dated:- 28-5-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For the Appellant : Smt. K. Haritha, DR For the Respondent : Non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, an individual, filed return of income for the assessment year 2007-08, on 28.7.2007 declaring a total income of Rs.3,58,500, after claiming exemption in respect of long term capital gains of Rs.765,44,718 under S.54B and S.54F of the Act. The assessee sold two acres of land at Tellapur, Ramachandrapuram Mandal, Medak District for a stated consideration of Rs.70 lakhs. As against the stated consideration in the sale deed, supported by a certificate issued by Proprietor of M/s. G.S. Constructions, Shri G. Sudhakar Rao, to whom the land has been sold, the bank statement of the assessee showed receipt of Rs.1.01 crores. The assessee claimed that the said Sudhakar Rao intended to buy one acre of land, adjacent to the assessee s la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed by the assessee. 5. On appeal, the CIT(A), relying on the reply of Shri G.Sudhakar Rao to question No.4, which formed part of statement recorded on 15.10.2009 from him, wherein he asserted to have paid only an amount of Rs.71,00,000 to the assessee for the purchase of 2 acres at Tellapur Village, the CIT(A) concluded that the sale consideration for the land sold by the assessee was only Rs.71,00,000 and not Rs.1,01,00,000. 6. Aggrieved by the order of the CIT(A) on this issue, Revenue is in appeal before us. 7. The Learned Departmental Representative, strongly supporting the order of the Assessing Officer, submitted that the CIT(A) was not correct in directing the Assessing Officer to adopt the sale consideration at Rs.71 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to interfere with the impugned order of the CIT(A) on this aspect. We accordingly uphold the same, rejecting the ground of the Revenue on this issue. 9. As for the other ground relating to deduction claimed under S.54F of the Act, facts in brief are that the assessee, against the capital gains computed, claimed deduction under S.54F of Rs.53,69,718, which is the amount incurred for purchase of plot bearing No.402, Vivekanand Nagar Colony, Kukatpally on 27.7.2006 for a sum of Rs.54,45,000 on which construction of the house was completed on 1.6.2009. The Assessing Officer observed that the assessee had sold the land on 5.10.2006 and since the asset in respect of which deduction under S.54F was claimed was purchased on 27.7.2006, viz. pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that the land on which construction was taken up, was purchased on 27.7.2006, whereas the sale of the capital asset giving rise to capital gains, viz. land, was done on 5.10.2006, and thus, the acquisition/construction of the new asset has preceded the sale of the capital asset giving rise to capital gains. On a careful reading of the provision contained under S.54F of the Act, we are unable to locate any precondition to suggest that construction of the new residential house must commence after sale of the original asst. The only condition imposed is that it is to be completed within three years from the date of sale of original asset. The decision of Karnataka High Court in the case of Subrahmanya Bhat (supra), relied upon by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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