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2016 (12) TMI 447 - ITAT CHENNAI

2016 (12) TMI 447 - ITAT CHENNAI - TMI - Disallowance of claim made by the assessee u/s 54F - Held that:- As per sec. 54F, if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged u/s 45 of the Act. Similarly, the requirement is to purchase new asset before one year or after two years of the date on which the transfer took place. In this case, the fact that the assessee has purchased the new asset wi .....

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15 (12) TMI 1075 - PUNJAB AND HARYANA HIGH COURT ) relied upon by the assessee. The High Court has held that sec. 54F nowhere envisages that the sale consideration received by the assessee from the original capital asset mandatorily should to be utilized for the purchase or construction of the new house property. The simple requirement is to invest in an asset within the stipulated time. In this case, the assessee has invested within the stipulated time. Therefore, we hold that the assessee is e .....

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013-14. 2. All the grounds of appeal are relating to the disallowance of claim made by the assessee u/s 54F of the Income-tax Act, 1961[in short the Act ]. 3. During the previous year relevant to the assessment year 2013-14, the assessee sold a vacant land at Bangalore admeasuring 2400 sq ft for a consideration of ₹ 90 lakhs to Shri Kotta Mahesh and Mrs. Potlapalli Divya on 17.9.2012 and claimed the exemption u/s 54F to the extent of ₹ 81,76,700/-. From the assessment records, the As .....

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strict the exemption of capital gains u/s 54F at ₹ 51,36,785/-(i.e the investment made from sale consideration). In response to the show cause notice, she explained that the assessee has sold the property for a sum of ₹ 90 lakhs and acquired a new property on 30.1.2013 i.e within two years from the date of sale of the property, hence she is entitled for the deduction u/s 54F of the Act which was claimed in the return of income. Not being impressed with the explanation offered by the .....

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an Sharad Ruparel vs ACIT, 27 SOT 61 and Hyderabad Bench decision in the case of V. Kumar vs DCIT , 135 ITD 116. 5. Aggrieved by the order of the CIT(A), the assessee filed appeal before us. 6. Ld. AR, Shri R.M. Narayanan, appearing for the assessee argued that the assessee has sold the property on 17.9.2012 and acquired the new property on 30.1.2013 i.e within two years from the date of the sale of the original asset. The sale consideration of the asset sold was ₹ 90 lakhs and the cost of .....

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uction u/s 54F of the Act. The only requirement of sec. 54F is that the new asset required to be acquired within two years but not the source of investment. The assessee is free to invest from the sale proceeds his own source of income and also from borrowed funds. The Assessing Officer s observation that the balance has been funded out of bank loan and the bank loan was given only based on the credentials of the assessee s son Shri Aneesh Sivakumar and daughter-in-law Smt Neha Bhujang and their .....

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apil Kumar Agarwal, 66 taxmann.com 191. Held In order to avail benefit under section 54F, the assessee is required to either purchase a residential house within a period of one year before or two years after the date on which transfer takes place or construct a residential house within a period of three years after that date. In such cases, the capital gains shall be computed as per clauses (a) and (b) of sub-section (1). In case, the assessee is not able to appropriate the sale proceeds of long .....

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ion 54F nowhere envisages that the sale consideration obtained by the assessee from the original capital asset is mandatorily required to be utilized for the purchase or construction of a house property. No provision has been made by the statute that in order to avail benefit of section 54F, the assessee has to utilize the amount received by him on sale of original capital asset for the purposes of meeting the cost of the new asset. Once that is so, the assessee was entitled for benefit under se .....

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TR 208 decided by the jurisdiction High Court viz., High Court of Madras, it has been clearly held even if the sale proceeds are not invested in purchase of new property, still the deduction u/s 54F is to be allowed for investment in new property as per the plain language and intention of the section. Section 54F allows deduction for investment in new property even one year before the sale of the old property giving rise to capital gains. If the Assessing Officer were to insist that only the sal .....

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ame is required to be interpreted in such a manner as not to nullify the object. 7. The Delhi High Court in CIT vs. Ravindra Kumar Arora (ITA No. 1106 of 2011) held that Section 54F mandates that the house should be purchased by the taxpayer and it does not stipulate that the house should be purchased in the name of the taxpayer only. Objective of section 54F of the Act and the like provision such as section 54 of the Act is to provide impetus to the house construction and so long as the purpose .....

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d not be denied on hyper technical ground. The Honourable HC also relied on the Andhra Pradesh High Court ruling in Late Mir Gulam AIi Khan Vs. CIT, (1987) 165 ITR 228 (AP) where in it was held that: Object of granting exemption under Section 54 of the Act is that the taxpayer who sells a residential house for purchasing anoth1r house must be given exemption so far as capital gains are concerned. The word "assessee" must be given wide and liberal interpretation so as to include his leg .....

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otal investment of ₹ 3,28,15,000/-. 8. On the other hand, the ld. DR argued that the State Bank of India granted the loan on the strength of the repaying capacity of the assessee s son Shri Aneesh Sivakumar and daughter-in-law Smt. Neha Bhujang. The loan was also repaid by Shri Aneesh Sivakumar from his own sources. The assessee is a retired person and her age and income earning capacity cannot not impress the banks to extend the loan facility of such huge amount. Therefore, the ld. DR arg .....

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₹ 1,44,59,800/- alongwith her son Shri Aneesh Sivakumar and daughter-in-law Smt Neha Bhujang. From the sale proceeds of ₹ 90 lakhs, the assessee has invested ₹ 56,54,000/- and the balance amount was funded from State Bank of India loan. The property was acquired jointly in the names of assessee and her son and daughter-in-law. The property was acquired within two years from the sale of the impugned asset. The property was acquired before filing the return of income and claimed .....

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y long-term capital asset, not being a 22residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or 23[two years] after the date on which the transfer took place 22purchased, or has within a period of three years after that date 24[constructed, one residential house in India] (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of .....

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25[Provided that nothing contained in this sub-section shall apply where- (a) the assessee,- (i) owns>25a 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) 26constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the orig .....

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