TMI Blog2019 (2) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, this Tribunal is of the considered opinion that what is contemplated in the provisions of Income-tax Act for claiming exemption under Section 54 of the Act is investment of funds for the purpose of construction. The moment assessee invested the entire capital gain for the purpose of purchasing a residential house or construction of residential house, the condition stipulated in the provisions to claim exemption is satisfied, therefore, the Assessing Officer cannot disallow the claim of the assessee. Assessing Officer is not disputing the fact that the assessee has invested the funds. What is disputed is that the construction was not completed. In view of judgment of Madras High Court in Sardarmal Kothari (2008 (6) TMI 15 - MADRAS HIGH C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -12, Chennai, dated 12.12.2017 and pertains to assessment year 2012-13. 2. The only issue arises for consideration is denial of exemption claimed by the assessee under Section 54 of the Income-tax Act, 1961 (in short 'the Act'). 3. Shri D. Anand, the Ld.counsel for the assessee, submitted that the assessee sold a flat of 1601 sq.ft. and undivided share of land of 240 sq.ft. alongwith common built up area and covered car park of 120 sq.ft. for a total consideration of ₹ 1,39,84,000/- to one Shri J. Antony on 22.03.2012. In fact, according to the Ld. counsel, the said flat was purchased by the assessee on 14.09.2007 for a total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .counsel for the assessee, submitted that the Assessing Officer found that the assessee has deposited in the Capital gain Account at Vijaya Bank, Vadapalani Branch only on 31.07.2012. According to the Ld. counsel, for the assessment year 2012-13, the due date for filing of return of income was extended by the CBDT till 31st August, 2012, therefore, the assessee can deposit the money in the bank on or before 31st August, 2012. In fact, the assessee deposited the money in the bank account on 27.08.2012, which is within the due date fixed by the CBDT for filing return of income. Therefore, the Assessing Officer is not justified in disallowing the claim of the assessee. Referring to the order of the Assessing Officer, more particularly at para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pet Taluk, Kanchipuram District. The assessee has claimed that a residential house was constructed. However, this fact is disputed by the Revenue. The Revenue claims that what was purchased by the assessee is a vacant land and also claims that the construction activity is in progress and the building was not completed. The Revenue also claims that the assessee has obtained only a temporary electricity service connection for the purpose of construction. 8. The Assessing Officer disallowed the claim of the assessee on two grounds. The first ground of disallowance is that the capital gain was not deposited within the due date for filing return of income, in the Capital Gain Account. As per the orders of both the authorities below, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction was not completed. In view of judgment of Madras High Court in Sardarmal Kothari (supra) and the decision of this Tribunal in Mrs. Seetha Subramanian (supra) and the CBDT circular No.471 dated 15th October, 1986 and in No.672 dated 16th December, 1993, mere investment of the capital gain in the construction of residential premises is more than sufficient for claiming exemption under Section 54 of the Act. Therefore, in the second ground of disallowance also, the Assessing Officer fails. 11. Now the Assessing Officer claims that the assessee has constructed only 215 sq.ft. of house. It is not in dispute that what is constructed is 215 sq.ft. of residential house. The CIT(Appeals) rejected the claim of the assessee on the ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is totally absent in these cases. There is no material to entertain these appeals. The appeals fail and the same are dismissed. Consequently, connected miscellaneous petition is also dismissed. 12. In view of the above finding of Madras High Court, this Tribunal is of the considered opinion that since the assessee has invested the entire funds in purchasing the land to construct the residential property, there cannot be any denial of exemption under Section 54 of the Act. The construction was admittedly in progress and the assessee also obtained temporary electricity service connection which also supports the case of the assessee. Therefore, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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