TMI Blog2019 (2) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... he old house to the extent it got invested in the construction of the new house would be exempt u/s 54 and Section 54 does not lay down that the construction of the new house must taken after the sale of the old residential house or that the sale proceeds of the old residential house must be used for the construction of the new residential house. The law is fairly settled on this aspect that for acquiring the new house, it is not necessary that the assessee must utilize only the sale proceeds of the old house. By respectfully following this line of decision of the higher fora, we hold that the authorities below are not correct in refusing to accept the claim of the assessee to deduct such part of amount which was invested in the constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 2008. In this process, they have earned the long term capital gains of ₹ 1,35,52,454/-. Out of the sale consideration, they have invested a sum of ₹ 58,55,000/- by way of payment of installment for a construction linked residential house booked in the join name of the assessee and his wife in the project under the name and style of Omaxe Twin Towers located at Sector 50, Noida. They have deposited a sum of ₹ 60 lacs and ₹ 39.7 lacs respectively in the Capital Gains Account with Vijaya Bank and consequently, the entire amount of capital gains were claimed as deduction u/s 54 of the Income-tax Act, 1961 ( the Act ). 3. The assessee filed the return of income for the Asstt. Year 2009-2010 on 29.9.2009 declarin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was an unspecified date after 23.3.2011 and thus it is quite unlikely to be within the time frame i.e. 10.04.2011. Consequently, learned CIT(A) found that the assessee made a payment of ₹ 28 lacs before the sale of the old property and such an amount is not qualified to be deducted u/s 54 of the Act. On this premise, learned CIT(A) confirmed the assessment order and dismissed the appeal. 5. Assessee is, therefore, aggrieved by the orders of the authorities below, and preferred this appeal before us stating that there is no justification for the authorities to say that the deduction u/s 54 of the Act is inadmissible on the amount that was paid prior to the sale of the old property and also that if at all any disallowance is require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f house and it should be deemed that sufficient steps have been taken satisfying the requirement of Section 54. 8. Per contra, learned DR placed reliance on the orders of the authorities below and submitted that there must be substantial compliance with the law and when the assessee does not prove to have taken sufficient steps for acquiring the property within three years after the sale of the old property, it is not possible to extend the benefit u/s 54 of the Act. 9. We have gone through the record. In so far as the facts are concerned, there is no dispute. The old property was sold for ₹ 1.5 crores by the assessee and his wife and the long term capital gain fallen to the share of the assessee are to the tune of ₹ 67,76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 54 does not lay down that the construction of the new house must taken after the sale of the old residential house or that the sale proceeds of the old residential house must be used for the construction of the new residential house. Besides this, the law is fairly settled on this aspect that for acquiring the new house, it is not necessary that the assessee must utilize only the sale proceeds of the old house. By respectfully following this line of decision of the higher fora, we hold that the authorities below are not correct in refusing to accept the claim of the assessee to deduct such part of amount which was invested in the construction activity of the new house earlier to the sale of the old house. 12. Now turning to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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