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2012 (9) TMI 40 - AT - Income TaxDeduction u/s 54 - LTCG arising from sale of a residential flat on 07.03.06 - dis-allowance on ground of not producing evidence of taking possession of flat within two years as applicable for investment in case of purchase of flat - Held that:- In the present case, the assessee had booked the new flat with the builder and as per agreement, the assessee was to make payment in installments and the builder was to handover the possession of the flat after construction. It has therefore to be considered as a case of construction of new residential house and not purchase of flat. Therefore, capital gain had to be invested within a period of three years from the date of transfer. Old flat had been sold on 7.3.2006 and therefore the assessee was required to construct a new residential house by 6.3.2009. Hence, assessee had invested the capital gains in construction of a new residential house within a period of three years, this should be treated as sufficient compliance of the provisions. It is not necessary that the possession of the flat should also be taken within the period of three years. Merely because the possession had not been taken within the period of three years, the exemption cannot be denied Dis-allowance on ground of non deposit of unutilized capital gain amount in the capital gain account scheme before the due date of the filing of the return of income for the relevant year - assessee had deposited Rs 1 lacs as booking amount before due date of filing of return - Held that:- In our view, this is only a technical default and on this ground the claim of exemption cannot be denied particularly when the amount had been actually utilized for the construction of residential house and not for any other purpose - Decided in favor of assessee
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