TMI Blog2015 (3) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the Ground to 2nd floor of the residential building upto 31.3.2010 amounting to ₹ 72,91,836. In this factual matrix, we are of the opinion that the assessee is eligible for exemption under Section 54F of the Act. In coming to this finding we draw support from the decision of the co-ordinate bench of the Tribunal in the case of Nipun Mehrotra (supra),wherein following the decision of the Hon'ble Gauhati High Court in the case of Rajesh Kumar Jalan (2006 (8) TMI 126 - GAUHATI High Court ), it was held that when the sale consideration / capital gains has been utilized for the purchase or construction of the new asset before the due date for furnishing the return of income under Section 139(4) of the Act, the assessee is entitled to exemption under Section 54F of the Act. The learned CIT (Appeals) in the impugned order has, also observed that the claim for exemption, in respect of the other co-sellers of the said property, has been allowed by the Department. In this view of the matter, following the decision of the co-ordinate bench of the ITAT, Bangalore in Nipun Mehrotra (supra), we find that revenue has failed to controvert the decision of the learned CIT (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 98 of Hoody village, K.R. Puram Hobli, Bangalore measuring 2 acres 26 guntas and 2 acres 26 guntas respectively for a total amount of ₹ 5,75,00,000; of which ₹ 1.25 Crores credited to the assessee's bank account was a part. When the Assessing Officer proposed to tax this amount as capital gains, the assessee contended that in order to assess the same under capital gains, the conditions prescribed in sections 2(14), 2(47) r.w.s. 45 and 54 are to be satisfied and since the property in respect to which he relinquished his rights was agricultural land, the proceeds ofRs.1.25 Crores received by him were exempt. 2.1.3 The Assessing Officer did not accept these contentions of the assessee as the schedules thereto did not indicate the said property to be agriculture land and further the same had been transferred to a company for development into residential apartments. The Assessing Officer also noted that the further sale deeds dt.24.2.2005 between Smt. Bibi Aleema, Sri Syed Ibrahim and M/s. Kristal Projects (India) Pvt. Ltd., mention the said property to be converted land. In this factual matrix, the Assessing Officer came to the view that what is relinquished is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for exemption under Section 54F of the Act, by following the decision of the co-ordinate bench of the ITAT, Bangalore in Nipun Mehrotra V ACIT (2008) 297 ITR (AT) 110 (Bang) and directed the Assessing Officer to verify the assessee's claim of expenditure of ₹ 1,28,62,774 invested in the new property and to allow the expenditure up to 31.3.2010 as exemption under Section 54F of the Act. 4. Aggrieved by the order of the CIT (Appeals), Mysore dt.13.9.2013 for Assessment Year 2008-09, the Revenue has preferred this appeal raising the following grounds :- 1. The CIT (Appeals) erred in giving relief to the assessee in ITA No.383/Salary/CIT(A)-V/12-13. 2. In this case, the assessee did not file the return of income voluntarily, but, he filed it only after issue of a notice under Section 148. 3. Only when it was noticed during scrutiny proceedings that the assessee received ₹ 1.25 Crores on relinquishment of right in the property at Sy. No.97 98 of Hoodi Village, KR Puram Hobli, Bangalore, the assessee put forth his claim for deduction under Section 54 / 54F. 4. The due date of filing of return for A.Y. 2008-09 was 31.7.2008, whereas the commencemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had invested a sum of ₹ 1,28,62,774 in construction of residential flats upto 31.3.2010, even though he had invested the amount in Capital Gains Accounts Scheme may be confirmed. OR The Hon'ble ITAT may hold that in view of the City Civil Judge s order dt.30.01.1997, drawing up the Sale Deed Decree in O.S.No.3486/1995, the actual sale took place in the year ended on 31.3.1997 and the long term capital gains, if any, should be assessed for the Assessment Year 1997-98 and not for the Assessment Year 2008-09. 2. For these and such other grounds which may be urged at the time of hearing, it is prayed that the reliefs, as prayed for, may be granted. 6. Exemption under Section 54 / 54F of the Act. 6.1 Though Revenue has raised as many as 11 grounds in this appeal, a perusal thereof indicates that the only issue raised is in respect of challenging the order of the learned CIT (Appeals) as being erroneous in allowing the assessee's claim for deduction under Section 54 / 54F of the Act by following the decisions of the Hon'ble High Court of Karnataka in the case of Fatima Bai V ITYO in ITA No.435/2004 / 32 DTR 243 (Kar) and of the co-ordinate bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place by virtue of the Memorandum of Agreement dt.12.12.2007, when the assessee relinquished its right in respect of the said property at Survey No.26 27, Hoody village, K.R. Puram Hobli, Bangalore, then the LTCG worked out at ₹ 70,16,326 is exigible to tax in Assessment Year 2008-09. It is further submitted that the entire gains is exempt under Section 54F of the Act since an amount of ₹ 1,28,62,774 has been invested in the construction of the new property from 1.5.2009 to 31.3.2010, which as has been held by the learned CIT (Appeals), following the decisions of Fatima Bai (supra) and Nipur Mehrotra (supra), is within the time limit permitted under Section 139(4) of the Act. The learned Authorised Representative submitted that in view of the above, revenue s appeal on this issue is liable to be dismissed. 6.3 We have heard both parties and perused and carefully considered the material on record, including the judicial decisions cited and placed reliance upon. The issue, before us, for consideration is the assessee's claim for exemption under Section 54 / 54F of the Act. 6.4 At the outset, on an appreciation of the facts on record, we concur with the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Floor Rs.25,87,500 Total Investment Upto 31.3.2010 : Rs.1,28,62,774. 6.5.2 The assessee's contention is that since the concerned assessment year was 2008-09, the time limit to utilize the capital gains for making the deposit or to invest the capital gains in the construction of the new residential building is 31.3.2010, as per the provisions of section 139(4) of the Act. In support of this proposition, the assessee placed reliance on the decision of the co-ordinate bench of this Tribunal in the case of Nipur Mehrotra (supra); the decision of the Hon'ble Gauhati High Court in the case of Rajesh Kumar Jalan reported in 286 ITR 274 and of the Hon'ble High Court of Karnataka in the case of Fatima Bai (supra). 6.5.3 The fact that the assessee has invested the entire sale consideration / capital gains in the purchase of the site and in the construction of the residential property thereon by 31.3.2010 is not disputed. The dispute raised by revenue is that since the assessee failed to invest the capital gains of ₹ 70,16,326 before the due date of filing the return of income for Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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