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Smt Sumathi Gedupudi Versus Addl. Commissioner of Income-tax Range-13, Hyderabad

2015 (5) TMI 989 - ITAT HYDERABAD

Revision u/s 263 - error in the order of the Assessing Officer in accepting the claim of the assessee under S.54F - Held that:- It is not disputed that the assessee has in fact deposited the total amount in the purchase of the residential house during the stipulated period. Merely because the assessee has availed a bank loan of ₹ 45,45,855 and has invested in the purchase of the residential house, it cannot be denied exemption under S.54F of the Act. The fact that money to that extent has .....

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of the sale proceeds in the purchase of residential house qualifying for relief under S.54F, by investing the money out of the sale proceeds of the original asset available with it or by borrowing from the bank. We find that the decision of the Hyderabad Tribunal in Smt.V.Kumuda V/s. DCIT (2012 (2) TMI 212 - ITAT HYDERABAD) relied upon by DR relates to a decision in the Miscellaneous Application preferred by the assessee. At any rate, it is clear that two views are possible on this issue before .....

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the matter, we hold that the Commissioner was not justified in setting aside the assessment framed under S.143(3), as the order of the Assessing Officer could not be said to be erroneous and prejudicial to the interests of the Revenue. - Decided in favour of the assessee. - ITA No.1403/Hyd/2014 - Dated:- 1-5-2015 - SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI P.M.JAGTAP, ACCOUNTANT MEMBER For The Appellant : Shri M.Chandramouleswara Rao For The Respondent : Shri D.Sudhakar Rao CIT-DR ORDER Per G.C.Gu .....

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s neither erroneous nor it is prejudicial interest of the revenue. 3. On the facts and in the circumstances of the case, the Ld. Commissioner of Income-tax has erred in restricting the exception granted u/s. 54F to the extent of ₹ 1,04,51,312/- which is the amount out the sale consideration utilized in the acquisition of a residential house ignoring the fact that the appellant has also utilised an amount of ₹ 45,45,885/- in the acquisition of same residential house even though this a .....

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ary to the provisions of 54F as the conditions is that the cost of new house acquired should not be less than the amount of net sale consideration received on the transfer of the long term capital asset and should have been incurred within the stipulated time. 5. On the facts and in the circumstances of the case, the Ld. Commissioner of Income-tax has erred in not appreciating the fact that the Addl. CIT , Range 13, Hyderabad being the Assessing Officer has correctly consider the provisions of s .....

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under S.54F by restricting the deduction claimed to ₹ 1,04,51,312 and as an amount of ₹ 45,45,855 has to be disallowed representing bank loan used in the purchase of house by the assessee. The learned counsel for the assessee submitted that the assessee has invested a sum of ₹ 1,49,97,000 in the purchase of house. Out of the total investment made in the acquisition of house property, the assessee has utilised an amount of ₹ 45,45,855 by availing housing loan from Kotak M .....

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yderabad bench of the Tribunal in J.V.Krishna Rao V/s. Dy. Commissioner of Income-tax (24.taxmann.com.104); Munnir Khan V/s. ITO(41 SOT 504)(Hyd); Puspa Devi Tibrewala V/s. ITO (dated 22.3.2013 in ITA No1733/Hyd/2011 for assessment year 2007-08); and the decision of Delhi Bench of Tribunal in Kapil Kumar Agarwal V/s. ACIT( dated 16.7.2013 in ITA No.2975/Delhi/2013 for assessment year 2009- 10), besides the decision of Kerala High Court in ITO V/s. K.C.Gopalan (107 Taxman 591). He also relied on .....

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the submissions of the learned counsel for the assessee. He referred to the relevant provisions of S.54F of the Act in support of the case of the Revenue that the sale proceeds of an asset have to be invested in the specified asset within the stipulated time in order to claim deduction under S.54F of the Act. He submitted that the assessee has invested a sum of ₹ 1,04,51,312 out of the sale proceeds from shares of ₹ 1,63,45,644 and therefore, the Commissioner was justified in direct .....

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rs of the Assessing Officer and the Commissioner. We find that the basic facts of the case are not in dispute. The assessee has invested a sum of ₹ 1,04,51,312 out of the sale proceeds of the shares within the stipulated period. The balance amount of ₹ 45,45,855 was invested in the purchase of house by the assessee by availing housing loan from Kotak Mahindra Bank Ltd. We find that the issue before us with regard to grant of deduction/exemption under S.54F of the Act with regard to t .....

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ief under S.54F, by securing the money spent out of the capital gains from other sources available to it, either by borrowing or otherwise, it is eligible for relief under S.54F in respect of the entire amount of capital gains realised. It was held that in the circumstances, there is merit in the contention of the assessee that in as much as they have made deposits of the amounts equivalent to the capital gains realized in the Capital Gains Investments Scheme, even though part of those capital g .....

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ny circular requires establishing direct nexus between the amount received on sale and utilization in the purchase of residential house for the purpose of S.54F and other relevant provisions. The Tribunal held that since money has no colour, all that is required is compliance with the conditions of investment within stipulated time. In Puspa Devi Tibrewala (supra), Hyderabad Tribunal has decided the issue in favour of the assessee and has cited CBDT Circular No.667 dated 18.10.1993 in support of .....

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erS.54F of the Act. The fact that money to that extent has not come directly from the sale proceeds of the original asset received by the assessee, is not decisive of the issue. The fact remains that the amount received by the assessee on the sale of the original asset owned by it was invested in the purchase of the residential asset within the stipulated time, partly from the sale proceeds of the original asset directly and partly from the borrowed amount. The assessee has fulfilled all the con .....

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