TMI Blog2018 (3) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... /Net sale consideration The cost of new asset was taken at ₹ 30 lacs only and in this, set off was granted upto ₹ 15,07,606/-. The balance i.e. total capital gain : ₹ 29,72,370 minus ₹ 15,07,606 = ₹ 14,64,764/- has been taxed at the rate of 20%. I allow this appeal and direct the AO to take cost of new asset at ₹ 70 lakhs instead of ₹ 30 lakhs and calculate the amount of capital gain, if any. In other words, there will be no capital gain for tax in the hands of assessee. - ITA No. 2899/Ahd/2016 - - - Dated:- 7-3-2018 - Shri Rajpal Yadav, Judicial Member Assessee by : Shri Dhinal Shah, AR Revenue by : Smt.Anupama Singla, Sr.DR ORDER Assessee is in appeal before the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale consideration by the assessee : Rs.30 lakhs (b) Contribution of joint-owner : Rs.5 alksh (c) Loan from ICICI Bank in the name of assessee : Rs.40 lakhs Total : Rs.75 lakhs The ld.AO has granted benefit under section 54F to the extent of ₹ 30 lakhs, but did not grant with regard to set off of loan amounts. In other words, assessee claimed set off of capital gain arisen on sale of land against the loan amount treating as uitilisation of capital gain for purchase of a house. This plea of the assessee has been rejected by the ld.Revenue authorities below. 4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, whole of long term capital gain of ₹ 29,72,370/- is exempt. 6. The ld.DR on the other hand relied upon the order of the ld.CIT(A). He contended that order of the ld.CIT(A) is based on the decision of ITAT, Mumbai Bench in the case of Milan Sharad Ruparel, 27 SOT 61. She further contended that the assessee availed loan from bank and purchased residential house. He has not used that very amount for the purchase of house. 7. We have duly considered rival contentions and gone through the record carefully. This issue has been considered in various cases as relied upon by the ld.counsel for the assessee. We deem it pertinent to take note of head-note of decision rendered by Hon ble Kerala High Court as well as Hon ble Punjab and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54F qua the loan amount utilized for purchase of new house. This contention of the assessee was not accepted by the AO as well as CIT(A). However, on appeal, the Tribunal has reversed finding of both the authorities. The Hon ble High Court has noticed the finding of the Tribunal and thereafter upheld it. The finding of the Hon ble High Court in para-15 containing finding of the Tribunal reads as under: 15. It has been categorically recorded by the Tribunal that the assessee had made investment in between February 2008 upto August 2008 i.e. well within the stipulated period. The property was purchased for ₹ 3.32 crores whereas the shares which were sold had resulted in capital gain of ₹ 1.93 crores. The investment was more t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital assets. It will make it clear that if the transfer has not taken place then from where the funds would come for making the investment. The investment must be from some other sources and when assessee would receive sales consideration on transfer of a long term capital assets, he will claim set off of the capital gains against the investment already made for the purpose of exemption under section 54F. Learned DR has relied upon an order of the ITAT reported in Sher Mohammad v. Dy. CIT (Inv.) [2009] 27 SOT 61 (Jodh.URO). In that case, the ITAT has held that if investment was made out of loan amount then exemption under section 54F(1) will not be available. In the opinion of the ITAT, the assessee has to demonstrate source of funds, if in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. (Rs.59,14,747 minus ₹ 29,42,376). The ld.AO granted benefit of set off as under: Capital gain x cost of new asset /Net sale consideration The cost of new asset was taken at ₹ 30 lacs only and in this, set off was granted upto ₹ 15,07,606/-. The balance i.e. total capital gain : ₹ 29,72,370 minus ₹ 15,07,606 = ₹ 14,64,764/- has been taxed at the rate of 20%. I allow this appeal and direct the AO to take cost of new asset at ₹ 70 lakhs instead of ₹ 30 lakhs and calculate the amount of capital gain, if any. In other words, there will be no capital gain for tax in the hands of assessee. 10. In the result, appeal of the assessee is partly allowed. Pronounced in the Open Court on 7t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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