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Smt. Selvi Venkatasubramani Versus Income-tax Officer, Ward 9 (4) , Bangalore.

2015 (12) TMI 704 - ITAT BANGALORE

Claim of deduction u/s 54F - AO denied the claim of deduction on the ground that the assessee owned more than one residential house on the date of sale of the original asset - Held that:- As regards the denial of claim u/s 54F on the ground that the assessee did not deposit the sale proceeds in the capital gain account as per the provisions of subsec.( 4) of sec.54F, we note that this issue is now settled by the decisions of Fatima Bai vs. ITO reported in (2008 (10) TMI 563 - KARNATAKA HIGH COUR .....

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> As regards the objections of the authorities below in respect of the assessee owning more than two residential houses and utilisation of the sale proceeds for construction of new house, we find that the assessee has produced relevant record in support of the claim along with affidavit. Prima facie it appears that the residential house at Kilpauk, Chennai was demolished on 18/5/2007 and thereafter, construction was completed by 2/9/2009 as per the certificate issued by the Corporation of Chen .....

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verify the additional evidence filed by the assessee in support of the claim and then decide the issue as per law and in the light of the observations made by us. - Decided in favour of assessee for statistical purposes. - ITA No.1052/Bang/2013 - Dated:- 7-10-2015 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER and SHRI JASON P BOAZ, ACCOUNTANT MEMBER For The Appellant : Shri V.Chandrashekar, Advocate. For The Respondent : Shri G.Ramesha, JCIT(DR). ORDER Per VIJAY PAY RAO, JM : This appeal by the assessee .....

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t the principles of natural justice. 3. The learned CIT(A) is not justified in denying the exemption u/s 54F of the Act under the facts and circumstances of the Appellant's case. 4. The learned CIT(A) is not justified in holding that the property at Kilpauk, Chennai was not demolished before the sale of the vacant property at Mysore under the facts and circumstances of the Appellant's case. 5. The learned CIT(A) failed to appreciate that the property at Gedalahalli can by no stretch of i .....

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rned CIT(A) erred in giving direction to the A.O. in respect of an amount of ₹ 3,98,318/- under the facts of the Appellant's case. The direction is bad as no information was sought from the Appellant as regards this issue. 8. The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 9. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the inter .....

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submitted that the assessee has assumed wrong fact without verifying the claim of the assessee. It was submitted that the property at Kilpauk, Chennai was already demolished on 18/5/2007 whereas the capital asset in question was sold by the assessee on 07/06/2007. Therefore, as on the date of sale of the capital asset in question the property at Kulpauk, Chennai was not in existence. The CIT(A) did not accept the claim of the assessee by recording reason that the assessee has not filed any proof .....

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#8377; 38,409/- ii) Property at 241, Mint Street, Chennai Rs.1,26,600/- iii) Property at Kilpauk, Chennai Rs.1,04,300/- The property at Mint Street, Chennai is a commercial property and therefore, the same is not relevant for the purpose of considering the residential property for the purpose of sec.54F. The learned AR of the assessee has pointed out that the assessee sold his vacant site at Nazarbad Mohalla,Mysore on 7/6/2007 which has resulted the LTCG. The assessee has constructed the residen .....

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se. The learned AR of the assessee has also submitted a certificate issued by the Corporation of Chennai dated 23/7/2015 wherein the details of the status of property i.e. date of demolition and reconstruction approval as well as completion of the property and assessed to house tax, has been certified by the Corporation. The learned AR of the assessee has submitted that as per directions of this Bench, the assessee obtained the certificate and is being filed in support of the claim that on the d .....

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garding nondeposit of the capital gain amount in the specified capital gain bank account, the learned AR of the assessee has submitted that when sale proceeds and capital gain have been invested in construction of the new house within the period of limitation as per provisions of sec.139(4), then the claim of deduction u/s 54F cannot be denied. In support of his contention, he has relied upon the judgment of the Hon'ble jurisdictional High Court in the case of CIT vs. Smt.Vrinda P.Issac repo .....

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additional evidence produced by the assessee should not be admitted. 8. We have considered the rival submissions as well as the relevant material on record. As regards the denial of claim u/s 54F on the ground that the assessee did not deposit the sale proceeds in the capital gain account as per the provisions of subsec.( 4) of sec.54F, we note that this issue is now settled by the decisions of the Hon ble jurisdictional High Court in the case of Fatima Bai vs. ITO reported in (2009) 32 DTR (Ka .....

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the date of transfer if the capital gain is not invested in purchase of building, he should deposit the amount in the 'Capital Gain Account Scheme or else the assessee should invest the capital gains before filing of return within the permitted period under s. 139. In which event, the assessee will not be liable to pay capital gain tax. 9. The s. 139(4) declares that the assessee should file returns within the time prescribed, if he fails to file returns, he may file returns for any previous .....

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capital gains by purchase of a house property within the stipulated period of s. 54(2) i.e., before the extended due date for return under s. 139. The assessee technically may have defaulted in not filing the return under s. 139(4). But, however, utilised the capital gains for purchase of property before the extended due date under s. 139(4). The contention of the Revenue that the deposit in the scheme should have been made before the initial due date and not the extended due date is an untenab .....

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