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2015 (10) TMI 2045 - ITAT AHMEDABAD

2015 (10) TMI 2045 - ITAT AHMEDABAD - TMI - Entitlement to exemption u/s.54F - Held that:- In the present case, the assessee purchased new asset on 05/10/2009 and had transferred the original asset on 8/01/2008. As per Section 54F (1) of the Act, the exemption would be available if the assessee purchased the residential house within two years after the date when transfer took place. As per the judgment of K. Ramachandra Rao case [2015 (4) TMI 620 - KARNATAKA HIGH COURT] the provisions of section .....

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tional High Court or Hon’ble Supreme Court. Therefore, respectfully following the ratio laid down by the Hon’ble Karnataka High Court in the case of CIT vs K.Ramachandra Rao (supra), we hereby set aside the impugned order and direct the AO to re-compute the assessed income after granting the benefit of section 54F of the Act to the assessee. - Decided partly in favour of assessee for statistical purposes. - I.T.A. No. 2692/Ahd/2014 - Dated:- 10-9-2015 - SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) And .....

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learned CIT(A s) erred in not allowing exemption u/s.54F. 2. On the facts and in the circumstances of the case, the learned CIT(A s) erred in not appreciating that the investment in residential property was made before the expiry of 2 years from the relevant date. 3. On the facts and in the circumstances of the case, the learned CIT(A s) erred in not considering the latest decision on the above issue. Notice u/s.148 issued after the limitation period 4. On the facts and in the circumstances of .....

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3/2012 and served upon assessee on 28/03/2012. In response to the notice, the assessee filed return of income on 30/04/2012 received by the Assessing Officer (AO in short) on 01/05/2012. Subsequently, the AO framed assessment u/s.143(3) r.w.s. 147 of the Act vide order dated 30/03/2013; thereby the AO made addition of ₹ 28,07,078/- on account of Long Term Capital Gain (LTCG) as discussed in para-2 of assessment order, addition on account of unexplained investment in mutual funds of ₹ .....

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ads as under:- Notice u/s.148 issued after the limitation period 4. On the facts and in the circumstances of the case, the learned CIT(A s) erred in confirming the action of the Assessing Officer with regard to reopening of assessment as being barred by limitation. 3.1. The ld.counsel for the assessee submitted that the ld.CIT(A) failed to appreciate the fact that the reopening of the assessment was bad by limitation. 3.2. On the contrary, Sr.DR submitted that this argument of the assessee is mi .....

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ld not point out as to how the order of the reopening is barred by time. As per section 149 of the Act, no notice u/s.148 can be issued for relevant assessment year, if four years have elapsed from the end of the relevant assessment year, unless he case falls under clause (b). If four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or .....

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denying the deduction to the assessee and such act of the AO was confirmed by the ld.CIT(A). The ld.counsel for the assessee submitted that the assessee had sold office for ₹ 36 lacs on 08/01/2008. And had invested ₹ 1,06,00,000/- in residential property on 05/10/2009. The authorities below have grossly erred in not giving the benefit of section 54F of the Act. In support of the contention, ld.counsel for the assessee placed reliance on various case-laws enclosed with the paperbook .....

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He submitted that the AO has rightly denied the claim of deduction u/s.54F of the Act. 6. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the case-law relied upon by the ld.counsel for the assessee. The only question which needs to be decided is whether the assessee is entitled for deduction u/s.54F of the Act under the facts and circumstances of the present case. Before adverting to the rival contenti .....

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fter in this section referred to as the original asset), and the assessee has, 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, one residential house in India] (hereinafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the new asset is n .....

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e- (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 residential house, other than the one r .....

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e the assessee purchases, within the period of [two years] after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property" , other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as .....

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e 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 asse .....

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h, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly f .....

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f the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and (ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid. 6.1. A combined reading of section 54F(1) and 54F(4) of the Act, it is evident that the assessee would be entitled for exemption .....

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ed amount is concerned, it has to be deposited in a specified capital gain account before the due date of filing of return u/d.193(1) of the Act. The question which is required to be examined whether the assessee has utilized the amount before the time limit prescribed for such purpose or if not whether the amount was deposited in the manner prescribed u/s.54F(4) In the present case, the undisputed facts are that the original asset was transferred on and the new asset was purchased on 05/10/2009 .....

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this contention, ld.counsel for the assessee relied on the judgement of Hon ble Punjab & Haryana High Court rendered in the case of CIT vs. Jagtar Singh Chawla and judgement of Hon ble Karnataka High Court rendered in the case of CIT vs. K. Ramachandra Rao. The Hon ble High Court of Punjab & Haryana held as under:- In the case of Fathima Bai vs. ITO, ITA No.435 of 2004 it was held that the extended due date u/s. 139(4) would be 31.3.1990. The assessee did not file the return within the .....

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l due date and not the extended due date was held to be an untenable contention. In the present case, the assessee had proved the payment of substantial amount of sale consideration for purchase of a residential property on or before 31.3.2008, that was within extended period of limitation of filing of return. Only a sum of ₹ 24 lacs was paid out of total sale consideration on 23.4.2008, though possession was delivered to the assessee on execution of the power of attorney on 30.3.2008. Sin .....

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se within the three years from the date of transfer. Could he be denied exemption under section 54 F on the ground that he did not deposit the said amount in capital gain account scheme before the due date prescribed u/s.139(1) of the Act. The Hon ble High Court of Karnataka High Court held as under:- As it clear from Sub-section (4) in the event of the assessee not investing the capital gains either in purchasing the residential house or in constructing a residential house within the period sti .....

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