TMI Blog2003 (7) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee filed photocopy of registered deed for purchase of the plot. The Assessing Officer called upon the assessee to show as to how the exemption under section 54F was admissible to her as the provision of section 54F of the Act requires investment into a residential house and in the case of the assessee, she had purchased a residential plot only. The assessee submitted that section 54F of the Act requires that the assessee must have constructed the residential house within a period of 3 years after the date on which transfer took place. The purchase of the house was to be regarded as an act in the process of construction of residential plot. It was also contention of the assessee that entire sale proceeds of snares was invested in purchase of plot and requirement of section 54F stands satisfied. The assessee also placed reliance on the case of CIT v. Alps Theatre [l965] 58 ITR 192 (Punj.) and also C.B.D.T. Circular No. 667 dated 18-10-1993 issued by C.B.D.T. in which it was clarified that if the amount of capital gains for the purpose of section 54 and net consideration for the purpose of section 54F is appropriated towards purchase of plot and also towards construction of a resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years from the date of transfer of shares. The house, it was pleaded by the Ld. counsel for the assessee was not completed on account of injunction issued by Civil Court, Agra, but Ld. CIT(A) was of the view that the benefit under section 54F of the Act can be extended only when the assessee is able to prove about construction of residential house on the plot. The installation of tube-well, boundary wall or construction of one room will not be taken as complete compliance of the section 54F of the Act. The Ld. CIT(A) also noted that Circular No.667 of the C.B.D.T. is also applicable in the cases where the assessee had constructed residential house, then only cost of the plot shall be included in the same, but here the assessee had not constructed any house and reliance on the said circular was not justified. About the alternative plea, the Ld. CIT(A) noted that capital gains can be assessed in assessment year 1994-95 only when the assessee is able to prove on record that the assessee had complied with the requirement of section 54F(4) of the Act. The assessee had not deposited the amount of proceeds of transfer of assets as per provision of section 54F(4) and, thus, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in three years from the date of transfer of assets, which expired in assessment year 1994-95. Reference has been made to the decision of the Hon'ble Gujarat High Court in the case of Harsutrai J. Raval v. CIT [2002] 255 ITR 315, in which the same view was laid down. The contention is that in case capital gain is chargeable, then the same will be in assessment year 1994-95, when three years period expires. 8. As against it, the Ld. Senior DR placed reliance on the order of Assessing Officer and the Ld. CIT(A) and contended that the plea raised by the learned counsel had been dealt with at length by the authorities below. The assessee had not constructed any residential house and mere purchase of plot will not be sufficient compliance for getting benefit under section 54F of the Act, which has rightly been denied to the assessee by the Assessing Officer and his action has rightly been confirmed by the Ld. CIT(A). 9. We have considered the rival submissions and perused the records carefully and also gone through the case law. It is on record that the assessee herself had shown long term capital gain of Rs.39,70,625 on account of sale of shares of JIL, which took place on 8-4-1990 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... takes place, purchased, or has within a period of three years after that date constructed, a residential house. The quantum of deduction is itself dependent upon the cost of such new asset. It has been represented to the Board that the cost of construction of the residential house should be taken to include the cost of the plot, as in a situation of purchase of any house property, the consideration paid generally includes the consideration for the plot also. 2. The Board has examined the issue whether, in cases where the residential house is constructed within the specified period, the cost of such residential house can be taken to include the cost of the plot also. The Board are of the view that the cost of the land is an integral part of the cost of the residential house, whether purchased or built. Accordingly, if the amount of capital gain for the purposes of section 54, and the net consideration for the purposes of section 54F, is appropriated towards purchase of a plot and also towards construction of a residential house thereon, the aggregate cost should be considered for determining the quantum of deduction under section 54/54F, provided that the acquisition of plot and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1994-95. This plea has rightly been repelled by the Ld. CIT(A). Section 54F reads as under:- "Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.-(1) Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu Undivided Family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so muc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to long-term capital assets of the previous year in which such new asset is transferred. (4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139 in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of subsection (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: ..... 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