TMI Blog2013 (5) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... gain u/s 45 of the Act in the year in which the period of three years from the date of transfer of the original asset expires. I The department has not disputed the fact that the assessee has invested ₹ 84.00 lakh in purchase of land towards construction of the house, which could not be constructed within the stipulated period of 3 years as the possession of the land could not be delivered by the developer. In these circumstances, the assessee's claim of exemption u/s 54 of the Act could not be denied in view of proviso to section 54 of the Act - Appeal of the assessee is allowed - IT Appeal NO. 255 (HYD.) OF 2012 - - - Dated:- 15-2-2013 - CHANDRA POOJARI AND SAKTIJIT DEY, JJ. For the Appellant K. Sai Prasad. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 22 acres due to certain environmental issues. On considering the aforesaid facts the AO came to a conclusion that as the assessee has not constructed the residential house in terms with the provision contained u/s 54 of the Act, the exemption claimed is not allowable. Accordingly, the AO disallowed exemption claimed of an amount of Rs. 84,00,000/- u/s 54 of the Act. The assessee challenged the assessment order by preferring an appeal before the CIT(A). The CIT(A) also sustained the disallowance made as the assessee has not fulfilled the conditions laid down u/s 54 of the Act. 4. The learned counsel for the assessee submitted before us that the assessee claimed exemption of capital gain u/s 54 of the Act, of an amount of Rs. 84.00 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction of a residential house as per the mandate of section 54 of the Act. In this context, the learned counsel relied upon the following decisions: (i) Satishchandra Gupta v. Assessing Officer [1995] 54 ITD 508 (Delhi). (ii) Mrs. Seetha Subramanian v. Asstt. CIT [1996] 59 ITD 94 (Mad.) (iii) Smt. Rajneet Sandhu v. Dy. CIT (iv) CIT v. Sardarmal Kothari [2008] 302 ITR 286 (Mad.) (v) CIT v. R.L. Sood 5. The learned counsel further submitted that if ultimately the capital gain could not be utilized then the capital gain would be taxable only after the expiry of three years and not in the assessment year in which the exemption was claimed u/s 54 of the Act. In support of such contention, the learned counsel relied upon the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the end of the period of 3 years from the date of transfer of the original asset and it is the submission of the learned counsel that the assessee has offered the capital gain for taxation after the expiry of three years in the AY 2011-12. The coordinate bench of the Tribunal in case of M. Janardhan Reddy (supra) after interpreting the proviso to section 54F held in the following manner: "5. We have duly considered the rival contentions and the material on record. Though in the grounds of appeal, the assessee has contended that the room constructed on the new plot is a house, at the time of hearing, the learned counsel has clarified that he agrees that it cannot be called a house but his only contention is that the capital gain, if at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction made to be a house but he is only on the issue of taxing the gain, if it is taxable, in the appropriate year s provided in section 54F. Therefore, the decision in the case of Smt. Rohini Reddy (supra) is not applicable." 8. On examining section 54 and 54F, we find that the provision contained u/s 54 including the proviso are parimateria with section 54F of the Act. The proviso to section 54 also lays down that if the amount of capital gain is not utilized towards construction of residential house within a period of 3 years from the date of transfer of original asset, then, it will be charged to capital gain u/s 45 of the Act in the year in which the period of three years from the date of transfer of the original asset expires. In su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
