TMI Blog2015 (9) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... ed period of 3 years, therefore the events in the intervening period are immaterial as the ultimate purpose of the beneficial provision is acquiring of a residential house by the assessee. The case of the assessee fits into the requirements of the beneficial provisions of section 54F read with the CBDT Circulars as noted above for treating the same as construction of the house, entitling her the benefit of exemption from tax. Our above view finds strength in the decision of the Hon'ble Karnataka High Court in the case of CIT & Anr. Vs. Sambandam Udaykumar [2012 (3) TMI 80 - KARNATAKA HIGH COURT]- Decided in favour of assessee. Assessee herself had withdrawn her claim before the AO as contented by DR - Held that:- As find from the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption u/s 54 of the Income Tax act in respect of purchase of flat for a consideration of ₹ 70,25,000/-. During the course of assessment proceedings, the learned Assessing Officer (hereinafter referred to as the AO) asked the assessee to explain as to why long term capital gain claimed exempt should not be denied as sale consideration from property had been invested in new property after two years from the sale of old property. In reply to the notice, the assessee explained that she in her return of income for A.Y. 2008-09, had computed long term capital gain at ₹ 70,16,870/- on the sale of her share in ancestral property on 12.04.2007. She had invested ₹ 70,25,000/- on 15.10.2007 under the Capital Gain Account Scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The assessee filed an appeal before the Ld. CIT(A). The assessee claimed before the Ld. CIT(A) that in fact, the flat was booked within the stipulated period and even after completion of the construction, the possession of the newly constructed house was delivered by the builder to the assessee within the stipulated period of three years and, hence, exemption u/s. 54F was rightly claimed by the assessee. However, the Ld. CIT(A) was not convinced with the submissions of the assessee and upheld the disallowance made by the AO on the grounds firstly, the assessee had bought a built up flat which was ready for occupation and not which was under construction and further that to claim exemption, the assessee might have purchased the house with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was registered on 10.06.2009 and the developer handed over the constructed flat in the month of November 2009. The Ld. Counsel for the assessee has brought our attention to the allotment letter 10.4.2009 issued by the developer in favour of the assessee (Paper book page 48) which was issued in lieu of payment of booking amount of ₹ 5 lakh by the assessee through Banker s Cheque dated 11.4.2009 (paper book page 50). The Ld. Counsel has also relied on the copy of bank passbook to show that the amount was actually transferred to the account of the developer from the account of the assessee on 11.04.2009. Thus the under construction house was booked/allotted to the assessee and the initial payment of ₹ 5 lakh was also made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he under construction house and made the initial payment of ₹ 5 lakh to the developer before the expiry of stipulated period two years meant for the purchase of an already built up house and had further paid the entire capital gain money for the purchase of under construction house and the possession of the constructed house was also delivered to him within the stipulated period of 3 years, therefore the events in the intervening period are immaterial as the ultimate purpose of the beneficial provision is acquiring of a residential house by the assessee. The case of the assessee fits into the requirements of the beneficial provisions of section 54F read with the CBDT Circulars as noted above for treating the same as construction of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been parted by the assessee and invested either in purchasing a residential house or in constructing a residential house. If after making the entire payment, merely because a registered sale deed had not been executed and registered in favour of the assessee before the period stipulated, he cannot be denied the benefit of s.54F of the Act. Similarly, if he has invested the money in construction of a residential house, merely because the construction was not complete in all respects and it was not in a fit condition to be occupied within the period stipulated, that would not disentitle the assessee from claiming benefit under s.54F of the Act. The essence of the said provision is whether the assessee who received capital gains has inves ..... X X X X Extracts X X X X X X X X Extracts X X X X
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