TMI Blog2010 (8) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... ings of Rs. 20,000 is not enough to meet the monthly expenditure of the family - HELD THAT:- AO has not brought on record anything other than payment of municipal tax of Rs. 12,752. Unless the AO brought on record any evidence regarding the exact amount of expenditure incurred by the assessee in the form of bills, vouchers or bank withdrawals, we are not in a position to confirm this issue in its entirety. Accordingly, we confirm the addition to the tune of Rs. 12,752 paid towards municipal tax for which there is an evidence of expenditure. Thus, Appeal is partly allowed. Exemption u/s 54F - assessee not utilized the capital gains in purchase of plot and construction of house thereon. The plot was purchased much before the capital gain accrued/received by the assessee and the assessee has not produced any evidence to prove that he has constructed the house within a period of 3 years from the date of sale of the property- Also assessee has not invested the unutilized long-term capital gain in a specific bank account - HELD THAT:- From a bare reading of section 54F, we find that sub-section (1) should be read along with sub-section (4). If both these sub-sections are read in a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its appeal with regard to sustaining additions of Rs. 2,57,792 on account of unexplained credit and also regarding sustaining additions of Rs. 34,000 towards low drawings. The revenue is in appeal before us with regard to granting the benefit of exemption under section 54F to the assessee. 3. Brief facts of the case are that the assessee purchased a property for consideration of Rs. 2.25 lakhs and incurred expenditure of Rs. 37,792 towards Registration totalling of Rs. 2,57,792 in the assessment year 2001-02. The Assessing Officer found that there was no debit entries in the bank account and, hence, called for an explanation regarding sources for this investment. The assessee explained that he sold a shop for a consideration of Rs. 4 lakhs and the same was used for this purpose. The Assessing Officer noticed that the shop was sold in January, 2009, i.e., after the purchase of the property and as such sale proceeds of such shop could not have been used for purchase of the property. Accordingly, the said investment of Rs. 2,57,792 was brought to tax under section 69 of the Act. The same was confirmed by the CIT(A). 4. The learned authorised representative for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d chose the contents of the return as suits to them. Accordingly, in our opinion, the credit is to be given to the availability of cash to the tune of Rs. 2,14,012. Hence, this ground taken by the assessee is allowed to that extent of Rs. 2,14,012. 8. The next ground in the assessee s appeal is with regard to low drawing. The assessee shown drawing of Rs. 20,000. According to the Assessing Officer, it is very low and added Rs. 34,000 to the income of the assessee. 9. We have heard both the parties and perused the material available on record. According to the learned departmental representative, the assessee paid a Municipal Property Tax at Rs. 12,752 and the assessee s family consists of 5 members and the drawings of Rs. 20,000 is not enough to meet the monthly expenditure of the family. Hence, he argued that the addition of Rs. 34,000 is to be confirmed. However, the Assessing Officer has not brought on record anything other than payment of municipal tax of Rs. 12,752. Unless the Assessing Officer brought on record any evidence regarding the exact amount of expenditure incurred by the assessee in the form of bills, vouchers or bank withdrawals, we are not in a position to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the net consideration in respect of the original asset, so much of the capital gain as bears to the new whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45 : Provided that nothing contained in this sub-section shall apply where ( a )the assessee ( i )owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or ( ii )purchases any residential house, other than the new asset within a period of one year after the date of transfer of the original asset; or ( iii )constructs any residential house, other than the new asset, within a period of 3 years after the date of transfer of the original asset and ( b )the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head Income from house property . Explanation. for the purposes of this section Net consideration, in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m capital asset not being a residential house and 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 3 years after that date, construct a residential house, the capital gain shall be dealt with in accordance with provisions laid down in this section. Sub-section (4) further states that the amount of net consideration which is not appropriated by the assessee towards the purchase of the new asset made within 1 year before the date of which transfer of the original asset took place or which is not utilized by him for purchase or construction of the new asset before the date of the filing of the return of income under section 139, shall be deposited by him before furnish such return in an account in any bank or institution as may be specified by the Central Government. If both these sub-sections are read in a conjunction only one inference is drawn that to avail the benefit of section 54F, the assessee is required either to purchase a residential house out of the sale proceeds or long-term capital asset within a period of one year before or 2 years after the date on which transfer took place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99] 107 Taxman 591 in which Their Lordships have held that in order to get benefit of section 54, there is no condition that assessee should utilize the sale consideration itself for the purpose of acquisition of new property. In that case, the claim of the assessee was disallowed by the Assessing Officer on the ground that the same fund was not utilized for construction of the building and it was deposited in an approved bank. The assessee took a plea before the appellate authorities that he had completed the construction of a house in Calicut on 31-12-1983 at a cost of Rs. 2,98,300 the cost of building which he had sold was valued at Rs. 40,000. Therefore, the cost of construction of a new house property is more than the capital gain, even if any liability of capital gain would arise from the sale of his house. Their Lodships of the Kerala High Court have examined the issue and have held that the wording of section itself would make it clear that law does not insist for sale consideration obtained by the assessee itself should be utilized for the purchase of house property. The main part of section 54 provides that assessee has to purchase a house property for the purpose of his ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
