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2017 (4) TMI 1182 - AT - Income TaxClaim of deduction u/s 54F - Held that:- The assessee cannot get the benefit of Section 54F of the unutilized amount to the tune of ₹ 41,27,149/- as the said amount has not been invested by the assessee in the purchase/construction of new residential house property at Mahabaleshwar till the date of filing of return on 18-08-2011 nor the same has been deposited by the assessee in capital gain account with bank as stipulated u/s 54F(4) of 1961 Act. The assessee had claimed that she issued cheque to the Builder to the tune of ₹ 40,45,975/- dated 12th August, 2011 which was returned back to the assessee by the said builder namely ‘Kumar Builders’ a month later on 12-09-2011 with the comments "cheque sent back as favoring is wrong and date is also rewritten". The assessee has prayed that benefit of said cheque amount of ₹ 40,45,975/- should be granted to assessee u/s 54F of 1961 Act as it shows that the assessee made the payment on 12-08-2011 but due to some technical errors , cheque was returned by builder after one month . As per agreement dated 17-01-2011 , the assessee was required to issue the cheques in favour of ‘Windsor Park Collection account’. All other cheque were issued by the assessee in favour of ‘Windsor Park Collection account’ except this cheque which was stated to be returned by builder after one month due to technical reasons. Contention of the assessee of having paid defective cheque of ₹ 40,45,975/- to the builder namely ‘Kumar Builder’ which was not encashed by the said builder due to technical defects in cheque does not inspire confidence and cannot be accepted to the extent of granting exemption u/s 54F of 1961 Act due to reasons cited above. Thus, based on our above detailed discussions and reasoning and keeping in view factual matrix of the case, the assessee will be entitled to benefit u/s 54F of 1961 Act of the amount which was invested by the assessee in acquiring the aforesaid new under construction residential property till the date of filing of return of income on 18-08-2011 for which the AO is directed to grant exemption u/s 54F of 1961 Act after verification of records Decided against the assessee.
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