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2016 (5) TMI 1100 - ITAT CHENNAI

2016 (5) TMI 1100 - ITAT CHENNAI - TMI - Claim for deduction u/s.54F - Held that:- The assessee has invested ₹ 68,00,000/- before due date of filing belated return i.e. 31.03.2007 and took the possession as per the findings of the Commissioner of Income Tax (Appeals) on 15.12.2007, being within three years from the date of transfer/sale of original asset being 14.02.2005. The assessee has not invested in Capital Gain Account Scheme before 139(1) of the Act but complied with the conditions .....

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d. Commissioner of Income Tax (Appeals) relied on the legal provision and submissions of the assessee exhaustively with judicial decisions. Considering the factual aspects, genuiness of the transactions and beneficial aspects of the provisions, we are of the opinion that the Commissioner of Income Tax (Appeals) has rightly construed the findings and the explanation of the assessee with observation in his order and allowed the deduction u/s.54F of the Act - Decided against revenue - I.T.A. No.415 .....

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14 passed u/s.143(3) and 250 of the Income Tax Act, 1961 (herein after referred to as the Act ). 2. There is a delay of 47 days in filing the appeal by the Department. At the time of hearing the ld. Departmental Representative has filed an affidavit explaining the reasons for delay and the ld. AR has no serious objections for condonation of delay. After hearing the submissions, we are satisfied with sufficient and reasonable cause for filing the appeal belatedly and we therefore condone the dela .....

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hares of CTL amounting to ₹ 81,63,440/- and claimed exemption u/s.54EC and ₹ 10,00,000/- by investing in NABARD bonds and for balance claimed exemption u/s.54F by utilizing the funds in the construction of flat in Bangalore. The ld.Assessing Officer found the assessee has not submitted proof of investment in bond ₹ 10,00,000/- and also not disclosed value of flat ₹ 72,00,000/- in the balance sheet as on 31.03.2005 and believed that the income chargeable to tax has escaped .....

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ement and construction agreement of flat No.4B, Bearyers Acacia Lakeview, Bangalore. On perusal of the agreements, the Assessing Officer found that the agreement was entered on 13.12.2006 and not complied capital gain accounts scheme before due date u/s..139(1) of the Act and alleged the said investment of ₹ 72,00,000/- in the property after due date and observed that assessee has utilized net consideration only after due date of filing of return u/s.139(1) of the Act and denied exemption .....

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rther argued that the Assessing Officer is not correct in observing that the assessee has not invested the net consideration in the capital gain scheme but assessee has completed the construction of the residential property within the stipulated time and disclosed in Balance Sheet as on 31.03.2008. The assessee advanced money at initial stage and entered into agreement only in 2006 and completed construction within three years from the date of transfer of property which in not disputed by the As .....

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prove the assessment record is complete and discussed in para 3 & 4 of his order as reasons being genuine and there was a scope for escapement of income. The ld. Assessing Officer has applied his mind carefully before recording reasons and issued notice u/s.148 of the Act as the information of investment in NABARD capital bond u/s.54EC of the Act and the purchase and construction of property are not supported with evidence. Therefore the ld. Assessing Officer has sufficient reasons and re-o .....

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ssioner of Income Tax (Appeals) has considered submissions at page 5 to 9 of his order, with findings and factual aspects of investments, found that the assessee is an individual and due date of filing of return of income is 31.07.2005 and date for filing belated return u/s.139(4) of the Act being 31.03.2007 and the assessee has spent ₹ 68,00,000/- for purchasing and construction of the property till 31.03.2007. On comparison with the sale consideration of ₹ 81,63,440/- the assessee .....

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the basic conditions u/s. 54F(1) of the Act. With these findings, ld. Commissioner of Income Tax (Appeals) observed at para 5.2.1 of his order as under:- 5.2.1 I have considered the findings of the AO and also submissions made by the AR of the appellant and also perused the copy of the judgements filed with the submission. In the instant case, the due date of filing return of income u/s 139(1) of the IT Act was 31.07.2005 and due date for filing of return of income u/s 139(4) of the IT Act was .....

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stipulated period u/s 54F(1) of the IT Act. The issue involved in the appeal is whether the assessee is eligible for deduction u/s 54F of the I.T Act in a case where substantial part of sale consideration was utilized for acquisition of new asset within extended date of filing of return of income u/s 139(4) of the I.T Act 1961 particularly when main conditions u/s 54F(1) were fulfilled. The Hon'ble High Court of Punjab & Haryana in the case of CIT vs Jagtar Singh Chaw!a reported in [201 .....

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d that the capital gains is not chargeable when the appellant has purchased the new property before the extended due date of filing of return u/s 139(4) of the IT Act for the purpose of claim of deduction u/s 54 of the IT Act. Utilization of the funds in constructing the residential house within the stipulated period should be treated as sufficient compliance of Sec. 54 of the IT Act in the cases decided by Jurisdictional Tribunal in the case of Madhuvanprasad in ITA No.2485/Mds/2004 and K.S.Ram .....

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able deduction as per the directions of the above and grant relief accordingly . and deleted the addition. Aggrieved by the order, the Revenue has assailed an appeal before Tribunal. 6. Before us, the ld. Departmental Representative reiterated the findings of the Assessing Officer and argued that the Commissioner of Income Tax (Appeals) erred in deleting the addition and also failed to appreciate that the assessee has utilized net consideration after due date of filing of return. Further as per .....

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of re-assessment as the earlier assessment was completed u/s.143(3) of the Act r.w.s 147 on 4.12.2009 and on same issue with change of opinion, the Assessing Officer has denied the exemption u/s.54F on the ground that assessee has not utilized the net sale consideration before due date of filing of return of income and the assessee has substainted with evidence of investments before the lower authorities and relied on the order of Commissioner of Income Tax (Appeals) and prayed for dismissing th .....

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the net consideration in residential property and provision of Sec. 54F(1) of the Act are as under:- 54F. (1) [Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter 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 w .....

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e new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: [Provided that nothing contained in this sub-section shall apply where- (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 r .....

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rovisions considering the dates as under:- (i) Date of transfer of original asset : 14.02.2005. (ii) The date of filing of return : 17.03.2006. (iii) Due date of return for the Assessment year 2005-06 : 31.07.2005. (iv) Due date of filing belated return : 31.03.2007. (v) Possession of the property : 15.12.2007. On considering the provisions of law and facts of the case, the assessee has invested ₹ 68,00,000/- before due date of filing belated return i.e. 31.03.2007 and took the possession .....

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