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2016 (4) TMI 867 - ITAT HYDERABAD

2016 (4) TMI 867 - ITAT HYDERABAD - TMI - Deduction u/s. 54F - Held that:- In the present case, assessee has purchased a semi-finished house and completed construction before the three years period as prescribed. Revenue has not cited or placed on record any contrary judgment. Therefore, respectfully following the ratio laid down by the Hon'ble Karnataka High Court in the case of CIT Vs. K. Ramachandra Rao [2015 (4) TMI 620 - KARNATAKA HIGH COURT], we direct the AO to allow the capital gains exe .....

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house is more than the sale consideration, the ground may become academic. However, we direct the AO to allow cost of indexation as claimed and arrive at the correct capital gains and allow deduction u/s. 54F/54 thereon. - I.T.A. No. 1049/HYD/2014, I.T.A. No. 1053/HYD/2014 - Dated:- 29-2-2016 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Shri K.C. Dev Das, AR For The Revenue : Shri B. Kurmi Naidu, DR ORDER PER B. RAMAKOTAIAH, A.M : These cr .....

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e has claimed indexed cost of acquisition and arrived at capital gains of ₹ 1,80,45,600/-. Assessee deposited an amount of ₹ 80,00,000/- in capital gains accounts on 30-07-2010 (wrongly submitted and noted as 06-09-2010) and later purchased a semi-finished house on 16-06-2011 for a cost of ₹ 3 Crores and completed construction of house by 12-07-2012 (total investment was about ₹ 4 Crores). An application for obtaining occupancy certificate was made to GHMC on 10-08-2012 a .....

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4 ex-parte and brought the entire sale consideration to tax, disallowing the claim of Section 54F and also cost of acquisition. AO was of the opinion that assessee has not furnished evidence for completion of house within three years as per the provisions, nor deposited the amount in Capital Gains account within the time allowed u/s. 139(1) and has not furnished evidence regarding cost of acquisition. 4. Before the Ld. CIT(A), assessee filed additional evidence in support of contentions and reli .....

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deduction but directed to the extent deposited in bank a/c. Even, the claim of cost of acquisition and indexation were not considered or decided. Hence, cross-appeals. 5. Revenue, in its appeal in ITA No. 1053/Hyd/2014 has raised the following grounds: 2. The learned CIT(A) ought to have appreciated that the exemption u/s. 54F is not allowable unless the gain on sale of property is not deposited in notified schemes within the due date u/s. 139(1). 3. Whether on facts & circumstances of the c .....

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te of Section 139(1), the grounds raised by Revenue, on wrong assumptions, have no merits. 5.2. Even otherwise, Ld. CIT(A) has considered the decisions of Hon'ble Punjab and Haryana High Court in the case of CIT Vs. Jagtar Singh Chawla [87 DTR 217] [215 Taxman 154] and various other decisions listed in para 5.5 as under: i. CIT Vs. Jagrit Aggarwal [Taxmann.com (P&H)]; ii. CIT Vs. Rajesh Kumar Jalan [286 ITR 274] (Gau); iii. Fatima Bai [32 DTR 243] (Kar)]; iv. RKP Elayarajan Vs. DCIT [52 .....

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to ₹ 1,90,00,000 having been utilized in purchase/construction of a new asset amounting to ₹ 3,22,50,000 the deduction should have been allowed under section 54F of the Act as the same was in substantial compliance to the provisions of the said section instead of sticking to technicalities in an incentive provision and limiting the deduction to only ₹ 80,00,000/-. 3. The learned CIT(A) should have allowed indexation of the cost of acquisition of the original asset amounting to .....

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of this house within a period of three years from the date of sale of the original assets, i.e. by September, 2012. The appellant had submitted electricity and water bills before the Assessing Officer which were not accepted as adequate evidence by the Assessing Officer. 5.11 The appellant had also submitted that he had applied before the due date to GHMC for a completion certificate though the certificate had not been issued by GHMC. The appellant was, therefore, directed to furnish a copy of t .....

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TAT observed as follows: "It is also an undisputed fact that issuance of occupancy certificate is the prerogative of the local authority i.e., AMC and in this regard, the assessee has no control and it is beyond the power of the assessee to make the AMC issue the said Completion/Occupancy certificate before 31.3.2008. What was under the power and control of the assessee was only to move the AMC for completion certificate fulfilling all the requirements with the AMC for issuance of occupancy .....

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ates (ITA No.713 & 714/PN/2010, dated 07.01.2011). The decision in the case of Satish Bora & Associates was relied upon in the case of R.V. Nirman Ltd (ITA Nos.l03/Hyd/2012 and 262/Hyd/2011, dated 30.10.2012) by the jurisdictional ITAT. 5.14 For the purpose of deciding the present appeal, reference may be made to the relevant provisions of the Greater Hyderabad Municipal Corporation Act, 1955 which are reproduced below: "Section 455: Completion of certificates, permission to occupy .....

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ch building or of such work and shall apply for permission to occupy the building. (2) No person shall occupy or permit to be occupied any such building, or use or permit to be used the building or part thereof affected by any work, until:- a) permission has been received from the Commissioner in this behalf; or b) the Commissioner has failed for twenty-one days after receipt of the notice of completion to intimate his refusal of the said permission. 5.15 Similarly, the relevant provisions of th .....

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ority affirming that such building is for occupation, as per proforma given in Appendix under Clause(a) of sub-section(2) of Sec. 455 of the Act. 13.1.1. On receipt of the completion certificate the Authority shall inspect the completed building and premises to ensure that the work has been completed as per the sanctioned plan and other permissions. Based on the same, the occupancy certificate shall be issued or not issued. ….. 13.1.2. Provided that if the authority fails to issue the occ .....

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to Hyderabad and the appellant are similar to those of Pune which were taken note of in the case of Satish Bora and Associates: a. There is no concept of issue of completion certificate by the Municipal Authorities. Only an occupancy certificate is required to be issued .. b. The Municipal Laws/Rules specify a period of 21 days for the Municipal Authorities to process the application for issue of occupancy certificate. c. After the lapse of 21 days, the occupancy certificate can be presumed to .....

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the plan. There is no evidence on record to show that any such major deviation took place . 6.2. After the above discussion, Ld. CIT(A) however, granted deduction u/s. 54F to the extent of ₹ 80,00,000/- only instead of entire capital gain. The investment in new house is more than the capital gain/sale consideration. The only issue which might have restrained the Ld. CIT(A) could be the reason that assessee had deposited only ₹ 80 Lakhs and not entire sale consideration. 6.3. The Hon .....

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rnataka 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 stipulated in Section 54F( 1), if the assessee wants the benefit of Section 54F, then he should deposit the said capital gains in an account which is duly notified by the Central Government. In other words if he want of claim exemption from payment of income tax by .....

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