TMI Blog2018 (3) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... the residential house within the said period and how much was invested by the assessee within the said period for such residential house, requires verification by AO. We therefore set aside the orders of the authorities below and remit the issue back to the file of the AO for the limited purpose of verifying the quantum of investment made by the assessee for construction of the new residential house within the period mentioned in Sec.54F(1) of the Act and allow such deduction, if the construction of the house was completed within a said period. - Decided in favour of assessee for statistical purposes. - I.T.A. No. 2739/Mds/2017 - - - Dated:- 9-1-2018 - SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER For The Appellant : Ms. K. Hemalatha, ACA For The Respondent : Shri. N. Madhavan, Addl. CIT ORDER PER GEORGE MATHAN, JUDICIAL MEMBER: Assessee in this appeal assails restriction of its claim of ₹ 76,40,792/- made u/s.54F of the Income Tax Act, 1961 (herein after referred to as the Act ) to ₹ 37,73,230/-, while computing capital gains arising on sale of a property. 2. Ld. Counsel for the assessee submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4F (1)of the Act. As per the ld. Authorised Representative, ld. Commissioner of Income Tax (Appeals) confirmed the disallowance without any good reason. 3. Per contra, ld. Departmental Representative strongly supporting the orders of the authorities below submitted that assessee admittedly did not deposit the unutilized amount in an account under Capital Gains Accounts Scheme and therefore was not eligible for claiming deduction u/s.54F of the Act. According to him, the Assessing Officer had allowed the claim of the assessee to the extent she utilized the consideration received by him on sale of the shares, for the purpose of investment in new residential house before the last date for filing the return for impugned assessment year which was 31.07.2014. 4. We have considered the rival contentions and perused the orders of the authorities below. Argument of the assessee is that construction of the residential house on which it was claiming deduction u/s.54F of the Act was completed prior to 15.03.2017 and hence within the time period allowed for constructing a new residential house u/s.54F(1) of the Act. The question whether exemption could given under Section 54F of the Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- ( a) 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 under s. 45; ( b) if the cost of the 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 s. 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 residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or ( iii) constructs any residential house, other than the new asset, within a period of three years after the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income under sub-s. (1) of s. 139] in an account in any such bank or institution as may be specified in, and utilised 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; and, for the purposes of sub-s. (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this subsection is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-s. (1), then,- ( i) the amount by which- (a) the amount of capital gain arising from the transfer of the original asset not charged under s. 45 on the basis of the cost of the new asset as provided in cl. (a) or, as the case may be, cl. (b) of sub-s. (1), exceeds ( b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of transfer of residential asset or construct any residential house other than the new asset within a period of three years after the date of transfer of the residential asset. In the entire scheme there is no prohibition for the assessee putting up construction out of sale consideration received by such transfer of a site which is owned by him as is clear from the language used. It is open for the assessee to put up a residential construction or to purchase a residential house. It is not the requirement of law that he should purchase a residential site and then put up construction. Therefore, in the instant case admittedly the assessee has purchased a vacant site on 31st March, 2001. He sold the original asset on 27th Aug., 2003 on which date he was already owning a site. In fact even before sale of the original asset he had started construction on such site by availing loan from the bank. In terms of s. 54F(1) all investments made in the construction of the residential house of the said site within a period of one year prior to 27th Aug., 2003 would be eligible for exemption under s. 54F(1). Similarly, all investments in the said construction after 27th Aug., 2003 within a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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