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2015 (6) TMI 523 - ITAT HYDERABAD

2015 (6) TMI 523 - ITAT HYDERABAD - TMI - Disallowance of deduction claimed u/s 54F - Held that:- Assessee has not submitted any documentary evidence to establish his claim that the amount withdrawn from the bank account out of the sale proceeds of immovable property were actually utilized for construction of new house. Therefore, in absence of even a single piece of evidence to indicate that assessee has utilized sale proceeds/capital gain in construction of new residential house, the claim of .....

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ires to be considered afresh in view of additional evidence submitted by assessee by way of confirmation letter dated 28/01/12 from Parsn Foundation Pvt. Ltd. Accordingly, we set aside the order of ld. CIT(A) on this issue and remit the matter back to the file of AO for deciding the same afresh after due opportunity of hearing to assessee. - DEcided in favour of assessee for statistical purposes. - ITA No. 579/Hyd/2012 - Dated:- 5-6-2015 - Shri P.M. Jagtap and Shri Saktijit Dey,JJ. For the Petit .....

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ting capital gain. 3. Facts in brief relating to the first issue in dispute are, assessee an individual is a director in M/s VBC Ferro Alloys Ltd. For the AY under consideration, he filed his return of income on 31/07/2008 declaring total income of ₹ 8,01,325 besides agricultural income of ₹ 1,50,000. During the assessment proceeding, AO on verifying the materials on record noticed that though assessee during the year has sold immovable property and derived capital gain but at the sa .....

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as per the provision contained u/s 54(2), assessee has not deposited the sale consideration in capital gain account scheme, 1988. When AO called upon assessee to explain the reason for not doing so, it was submitted by assessee being unaware of the legal position, the sale consideration was deposited in SB account. Assessee further submitted that he has entered into agreement with his father, who is the owner of Plot No. 283 in Sy. Nos. 125 & 126 of Yousufguda village for construction of ho .....

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itions of section 54 and further he has not furnished any evidence regarding construction of house. Being aggrieved of disallowance of deduction u/s 54, assessee preferred appeal before ld. CIT(A). 4. In course of hearing of appeal before ld. CIT(A), reiterating what was stated before AO, assessee submitted that being unaware of the legal position, assessee had deposited the sale consideration in SB account in stead of capital gain account scheme. He further submitted, since the entire sale proc .....

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claim that assessee has utilized the capital gain in construction of a house, ld. CIT(A) held, the same is also not tenable as owner of the plot is assessee s father and as per the agreement, assessee has only requested his father for construction of residential house to which his father has agreed. However, the agreement which is an unregistered one, does not make it clear that any legal right has been conferred on assessee as far as ownership of the property is concerned. Ld. CIT(A) observed, .....

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e Act. He submitted, even if the capital gain is not deposited in capital gain account scheme that will not debar assessee from claiming deduction u/s 54, if otherwise, capital gain is utilized in construction of a new house within the prescribed period. In support of such contention, he relied upon a decision of Hon ble Gauhati High Court in case of CIT Vs. Rajesh Kumar Jalan, 157 Taxman 398, decision of ITAT Bangalore bench in case of Nipun Mehrotra Vs. ACIT, 110 ITD 520 and decision of ITAT H .....

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ubmitted, withdrawals made were for the purpose of construction of house property. 6. Ld. DR, on the other hand, submitted, as assessee has failed to comply to the conditions imposed u/s 54 of the Act by depositing the capital gain in capital gain account scheme he is not eligible for deduction u/s 54. He further submitted, as far as assessee s claim of utilizing sale proceeds in construction of new house, same cannot be accepted as neither assessee is owner of the property nor there is any evid .....

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. Undisputedly, assessee has not deposited the sale proceeds received by him from sale of immovable property in capital gain account scheme as required u/s 54(2) of the Act. However, in our view, noncompliance to such condition will not be so fatal to debar the assessee from getting benefit of section 54. However, the fundamental issue in the present appeal is whether assessee s claim that he has utilized the capital gain in construction of a new house is acceptable. As is evident, assessee has .....

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the paper book, though reveal that assessee has withdrawn an amount of ₹ 52,75,000 during the PY, but, for what purpose these amounts have been withdrawn is not known. Assessee has not submitted any documentary evidence to establish his claim that the amount withdrawn from the bank account out of the sale proceeds of immovable property were actually utilized for construction of new house. Therefore, in absence of even a single piece of evidence to indicate that assessee has utilized sale .....

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ed affidavits giving up their rights over the said property and also admitting the fact that entire investment in purchase of the property has been made by assessee. Whereas in the facts of the present case, no documentary evidence has been brought on record to establish the fact that assessee s father has given up his right over the property or assessee has actually made investment towards construction of house property. In the aforesaid facts and circumstances, the decision relied upon will be .....

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ame was adopted at ₹ 25,62,791. AO observing that assessee has not furnished any basis for adoption of cost acquisition at ₹ 8 lakhs, recomputed indexed cost of acquisition at ₹ 7,49,634. Before ld. CIT(A), assessee submitted the details of cost of acquisition as under: (Rs.) i) ii) 710/9960 sq.ft. of undivided share in land as per sale deed Stamp duty for executing sale deed 2,07,083 26,923 iii) iv) v) Cost considered by AO Cost of construction paid to Parsn Foundation Cost of .....

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