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TMI Blog2018 (11) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing grounds:- "1. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in holding the erroneous determination of long term capital gain at Rs. 72,50,000/- by Ld. DCIT on erroneous belief and misconception of law by denying the benefit claimed u/s 54F of Income Tax Act, 1961 of the Appellant. 2. That the appellant craves leave to add, amend, adduce or alter any ground or grounds on or before the hearing of the appeal." 2. The facts of the case are brought out at para 3 & 4 of the assessment order, which is extracted below for ready reference:- "3. Therefore the total consideration amount for the purpose of computation of Long Term Capital Gain should be Rs. 13593333/-. Now I am examining the conditions pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. 3. The ld. Counsel for the assessee submits that the assessee earned long term capital gain on sale of two plots of land. The total long term capital gain earned is Rs. 1,80,92,965/-. The assessee had made invested in REC Bonds of Rs. 50,00,000/- within the period allowed in law and claimed exemption u/s 54EC of the Act. This issue is not in dispute. He submitted that the assessee has advanced, for the purchase of two residential flats Rs. 20,00,000/- to M/s Exclusive Home Pvt. Ltd. and Rs. 40,00,000/- to M/s Amit Enterprises totaling to Rs. 60,00,000/- and that the assessee had further spent for construction of a residential house in Shantiniketan, an amount of Rs. 12,50,000/-. Before us, the ld. Counsel for the assessee submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct for investment made in one more residential house property. The undisputed fact is that the assessee had inherited one residential house prior to the sale of these two plots of land which had resulted in the assessee earning capital gain. As per the provision of Section 54F of the Act, the assessee is entitled to exemption for investment made in a second residential house property from out of the long term capital gains. Merely because the assessee has invested in more than one house property, he cannot be denied rightful exemption on an investment made on the second house property. The assessee claims that the amount of Rs. 40 Lakhs/- investment by him for the purchase of the residential plot by way of advances to M/s Amit Enterprises s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 of the Act and therefore meaning of full value of consideration as referred to in explanation to section 54F(1) of the Act is not governed by the meaning of the words full value of consideration as mentioned in section 50C of the Act as held by the coordinate bench of ITAT Jaipur in the case of Gyan Chand Batra v. ITO [2010] 8 taxmann.com 22 . The relevant portion of the order is extracted below: "From sub-s. (1) of s. 50C, it is clear that in case the consideration received is less than the value adopted by stamp valuation authority then the value so adopted is to be taken as full value of the consideration for the purposes of 5. 48. Sec. 50C provides a deeming provision for considering the full value of consideration as the value a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33 (Del)relied on. (Para 7.1) In Explanation to s. 54F(1), it is mentioned that net consideration means the full value a consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. The meaning of full value of consideration in Explanation to s. 54F(1) will not be governed by meaning o words 'full value of consideration' as mentioned in s. 50C. The value adopted for stamp duty is to be considered as full value of consideration for the purpose of computing the capital gains under s. 48. Sec. 54F(1) says that capital gains is to be dealt with in accordance with the provisions of sub-cls. (a) and (b) of s. 54F(1). I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction or purchase of new residential house. In the present case on hand, the assessee has invested net sale consideration for construction of new residential house property. Though, the full value of consideration as defined u/s. 50C of the Act is more than the net sale consideration as referred in section 54F(1) of the Act, once the net sale consideration has been fully applied under the provisions of section 54 of the Act, then the deeming consideration as defined u/s. 50C of the Act cannot be brought into the provisions of section 54F of the Act. Therefore, we are of the view that the assessee is eligible for exemption u/s. 54 of the Act, therefore, the whole of the capital gain is not chargeable to tax even if the capital gain is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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