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TMI Blog2015 (4) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... to Paramahamsa Foundation Trust"-, for a consideration of Rs. 2,87,28,750/-. In the returns filed under Section 153A of the Income-tax Act (for short hereinafter referred to as the Act) the assessee computed Long Term Capital Gains of Rs. 2,87,28,750/- before claiming exemption under Section 54B and 54F of the Act. During the course of assessment proceedings the assessee's representative was asked to substantiate the claim made for exemption under section 54B and 54F of the Act. In reply the assessee stated in the year 2005 i.e. on 31.3.2005 a sum of Rs. 31,00,000/- has been contributed towards house construction. Till that date a loan of Rs. 2,10,00,000/- was taken from Bank which was also utilized for construction. Therefore to the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However investment is made prior to more than one year before the date of transfer is not eligible for exemption. Accordingly, he granted exemption. The Revenue preferred an appeal challenging the said order. The Tribunal has affirmed the said order. It is against the said order the Revenue has preferred the said appeals. 3. The two substantial questions of law which arise for consideration in these batch of appeals are as under :- "(1) Whether the assessee is entitled to the benefit conferred under Section 54F when the sale consideration is utilized for construction of a residential house on a site which is owned by him within one year from the date of transfer? (2) When the assessee invests the entire sale consideration construction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the original asset, so much of the capital gain as bears to the 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 three years after the date of transfer of the original asset; and (b) the income from such r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head "Capital gains" 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es ; and (ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid.' Section 54F(1) provides, 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 and the assessee 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, the capital gain shall be dealt with in accordance with the said provision. This is subject to the provisions of Sub-section (4). Sub-section (4) stipulates if the amount of net consideration which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of transfer of residential asset or constructs any residential house other than the new asset within a period of three years after the date of transfer of the residential asset. In the entire scheme there is no prohibition for the assessee putting up construction out of sale construction received by such transfer of a site which is owned by him as is clear from the language used. It is open for the assessee to put up a residential construction or to purchase a residential house. It is not the requirement of law that he should purchase a residential site and then putup construction. Therefore, in the instant case admittedly the assessee has purchased a vacant site pri-31.3.2001. He sold the original asset on 27.8.2003 on which date he w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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