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2021 (12) TMI 506 - AT - Income TaxCorrectness of deduction claimed u/s.54F - purchase of residential flat by the assessee on 09.05.2016 at Mumbai whether it amounts to purchase of a new asset or construction of a new asset - AO regarded the acquisition of the flat as amounting to purchase of a new flat as purchased beyond the period of 2 years from the date of sale of the industrial lands and hence, the assessee had not complied with the conditions for grant of exemption since the purchase was made 5 days after the period of 2 years had expired - HELD THAT:- The date of purchase of the new asset is admittedly on 09.05.2016 which falls within the previous year relevant to Assessment Year 2017-18. The date of transfer is on 05.05.2014 falling within the previous year 2015- 16. In terms of proviso to section 54F(4) of the Act, the non-utilisation of net consideration deposited in the capital gain scheme account can be considered only in Assessment Year 2018-19. We are therefore of the view that the directions given by the CIT(A) holding that the purchase of a new flat will not amount to putting up construction and therefore the benefit of deduction will not be available to the assessee is a finding which is not necessary to be given in the appeal for AY 2015-16. The question whether the acquisition of flat by the assessee would amount to construction or purchase, is a issue which ought to have been left open by the CIT(A) for consideration in AY 2018-19. We leave this issue open for decision in Assessment Year 2018- 19. DR, however submitted that directions may be given to the AO, to take appropriate remedial action in Assessment Year 2018-19. We are of the view that it would be just and appropriate to make an observation that the AO will take appropriate measures as is open to the Revenue in law. With these observations, we allow the appeal of the assessee. Assessee appeal allowed.
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