9911796707
TMI Blog2012 (10) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1999-2000. 2. The respondent-assessee filed return of income on 28-06-1999 for the assessment year 1999-2000 declaring the income of Rs. 4,66,200/-. Subsequently, the assessee filed revised returns on 11-11-1999 declaring the income of Rs. 13,83,616/-. The income declared consists of income from property, capital gain and income from other sources. The Assessing Officer selected the returns filed by the assessee for scrutiny. The assessee has claimed deduction under section 54EA of the Income tax Act (hereinafter referred to as 'the Act') in respect of sum of Rs. 41,13,000/- invested in specified securities out of total consideration received from the sale of flats owned by the assessee. It is the case of the assessee that she has enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the assessee has not fulfilled the conditions laid down under section 54EA of the Act, hence she is not entitled for deduction under section 54EA of the Act. 3. The assessee being aggrieved by the assessment order dated 19-3-2002, preferred an appeal before the CIT (Appeals). The CIT (Appeals) after considering the matter in detail partly allowed the appeal denying the exemption under section 54 and allowed the appeal insofar as exemption under section 54EA is concerned. Even though the assessee has not received the sale consideration in cash pursuant to the agreement, she has received six flats as consideration. The sale consideration of three flats was invested in the long term capital gain. Hence, she is eligible for exemption u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of long term capital asset? 5. Sri. M. Thirumalesh, learned counsel appearing for the appellant contended that the order passed by the Appellate Authority as well as the Appellate Tribunal is contrary to law. Section 54 speaks of profit on sale of property used for residence. It provides that the long term capital gains arising from the transfer of a residential house are exempt from Income tax subject to reinvestment in acquiring a residential house within two years. The records disclose that the joint development agreement was entered into between the parties in the year 1994, the property was handed over to the Developer pursuant to the agreement and the construction was completed in the year 1998-99. After lapse of four years, the fla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... house. Further, she has alienated three flats for a sale consideration of Rs. 41,13,000/- and invested the same in the Specified Securities while retaining the other three flats. In view of that, she claimed exemption under section 54EA of the Act. The Assessing Authority misconstrued the Development Agreement and held that the assessee is not entitled for the benefit of section 54EA of the Act. The Appellate Authority after considering the matter in detail held that the assessee is entitled for exemption under section 54EA of the Act and the said order was confirmed by the Appellate Tribunal. There is no infirmity in the order passed by the Authorities below and sought for dismissal of the appeal. 7. We have carefully considered the argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the net consideration in any of the (bonds,.. debentures, shares of a public company or units of any mutual fund referred to in clause (23D) of section 10,] specified by the Board in this behalf by notification in the Official Gazette (such assets hereafter in this section referred to as the [specified securities]), 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 [specified securities] 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 [specified securities] is less than the net consideration in respect of the orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not be allowed under section 88. Explanation. For the purposes of this section,- (a) "cost", in relation to any [specified securities], means the amount invested in such [specified securities] out of the net consideration received or accruing as a result of the transfer of the original asset; (b) "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 asset as reduced by the expenditure incurred wholly and exclusively in connection with such transfer. 10. Reading of section 54EA of the Act makes it very clear that in case, the whole or any part of the net consideration of sale is invested ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
