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Shri Bolishetty Venkatesh Versus ITO, Ward 7 (2) , Hyderabad

2018 (1) TMI 508 - ITAT HYDERABAD

Claim of exemption u/s 54F - amount invested up to the time available u/s 139(4) - Held that:- The case of Sri Ajeet Kumar Jaiswal Vs. ITO (2017 (10) TMI 1143 - ITAT HYDERABAD) this Tribunal was considering the case of an assessee who had deposited the capital gains into ‘term deposit’ account and not the capital gains account as required u/s 54(2) of the Act and since the funds were not utilized for any other purpose but for construction of a new asset, this Tribunal had held that the assessee .....

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sessee has filed the return of income on 14-02-2013, therefore, the assessee is eligible for deduction u/s 54F of the Act for the amount invested by him till such date. In the case of Humayun Suleman Merchant Vs CCIT (2016 (9) TMI 70 - BOMBAY HIGH COURT) held that the assessee is eligible for deduction u/s 54F of the IT Act on the amounts spent for construction of a house till the date of filing of the return of income. Hence, the A.O is directed to allow the deduction u/s 54F of the Act accordi .....

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f income for the A.Y 2012-13 on 14-03-2013 declaring an income of ₹ 1,90,200/-. He also declared income from capital gains at Rs. Nil with a narration that the sale proceeds will be invested in construction of house property. The A.O issued a notice u/s 148 of the Act on 10-04-2013, against which, the assessee filed necessary information and requested that the return filed originally may be treated as the return filed in response to the notice u/s 148 of the Act. 3. During the reassessment .....

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the provisions of Sec 50C of the Act may not be applied. However, the A.O observed that the assessee has not sold the property to any of the persons who have created the problems and also that he did not agitate against the value adopted by the SRO at the time of registration of the sale deed. Therefore, he adopted the SRO values as sale consideration. Thereafter, he proceeded to consider the assessee s claim of deduction u/s 54 of the Act. He observed that the assessee has claimed a sum of  .....

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y up to the due date for filing of the return. 4. Aggrieved, the assessee preferred an appeal before the CIT(A), who confirmed the order of the A.O, and the assessee is in second appeal before us by raising grounds only against restricting the claim of exemption u/s 54F to ₹ 7,32,829/- and the consequential levy of interest u/s 234A and 234B of the IT Act. 5. The Ld. Counsel for the assessee submitted that the assessee has invested the entire capital gain for construction of a new house wi .....

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the decision of B Bench of this Tribunal in ITA No. 1707/Hyd/2016 in the case of Sri Ajeet Kumar Jaiswal Vs. ITO 6. The Ld. DR, on the other hand, supported the order of the authorities below and placed reliance upon the decision of the Hon ble Bombay High Court in the case of Humayun Suleman Merchant Vs CCIT [2016] 73 taxmann.com 2 (Bombay) 7. Having regard to the rival contentions and the material on record, we find that undisputedly the assessee has invested the entire capital gain in constru .....

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n of income u/s 139 of the Act, in an account of any such bank or institution as may be specified in, or utilized in accordance with, any scheme which, the Central Government may, by notification in the Official Gazette frame in this behalf and such return shall be accompanied by proof of such deposit. For the purpose of sub Sec. (1) of Sec. 54F of the Act, the amount if any, already utilized by assessee for the purchase or construction of new asset together with the amounts so deposited shall b .....

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t and whatever has been incurred by the assessee till such date should be allowed. In support of this contention, he has placed reliance upon the decision of the Hon ble High Court of Punjab and Haryana in the case of CIT Vs Ms. Jagriti Aggarwal (supra) and also the decision of the Hon ble High Court of Karnataka in the case of CIT Vs Smt. Vrinda P. Issac (supra). We find that in these two decisions the Hon ble High Courts have held that the reference to Sec. 139 of the Act in Sec 54F of the Act .....

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