TMI Blog2010 (4) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has purchased a residential house in March, 2003 for a sum of ₹ 22,61,757 by taking a housing loan of ₹ 17.50 lakhs from ICICI Bank. Subsequently, he sold certain shares in February, 2004 on which he has earned long term capital gains of ₹ 22,46,199. Accordingly, he claimed exemption u/s. 54F of the Act to the tune of ₹ 22,46,199. The Assessing Officer has reduced the amount of loan to ₹ 17,50,000 from the amount invested in the residential house and calculated the exemption restricting the same to ₹ 5,02,779 only. For this purpose, he contended that investment in residential house or new asset should be out of capital gains earned on transfer of shares i.e., old assets. Therefore, the AO he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hyderabad Bench of the Tribunal in the case of Gowrishankar Gupta reported in 22 SOT 131 (Hyd), he held that the assessee has not satisfied all the conditions laid down u /s. 54F of the Act since the assessee has not invested the capital gain on transfer of old asset in the acquisition of new residential house. He accordingly, upheld the order of the Assessing Officer. 6. Aggrieved with such order of the CIT(A), the assessee is in appeal before us by taking the following grounds: 1.1 The learned Commissioner Income-tax (Appeals)-XX, Mumbai erred in confirming the action of the Assessing Officer whereby the AO restricted the appellant s claim of exemption u/s. 54F of the Incometax Act, 1961 to the extent of ₹ 5,02,779/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the transfer of old house and the capital gain arising on sale is not directly used for the acquisition of the new residential house still the assessee is eligible for deduction u/s. 54 of the Act. Since the facts of the impugned appeal are identical to that of the case of the father of the assessee where the CIT(A) has allowed the relief and since the Revenue has not challenged the same, therefore, the assessee s case also could have been decided in the same lines and the CIT(A) should have allowed the claim of the assessee. 8. The learned DR, on the other hand, strongly relied on the order of the CIT(A). Referring to the decision of the Tribunal in the case of Milan Sharad Ruparel v. ACIT, reported in 121 TTJ 770 he submitted that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from his past savings. Conversely, he may place sale proceeds in long-term investment other than what is permitted under s. 54, but, all the same find money from the business or other source for approved investment within the time. Since law itself permits investment in a new property even before sale of property covered by ss. 54 and 54F, the law does not contemplate the identity of the funds on sale for its investment. Since money has no colour, all that is required is compliance with the condition of investment within the specified time. 10. Referring to the above, he submitted that the decision of the Tribunal as relied on by the learned DR is, in fact, in favour of the assessee. 11. We have considered the rival submissions mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ruparel (supra), as relied on by the learned DR, has held that it is not necessary that the same funds must be used for purchase of the new residential house but the funds should be available with the assessee for its investment in the residential house. The various other decisions relied on by the learned counsel for the assessee also support his case. In this view of the matter, we are of the considered opinion that the assessee is entitled to deduction u/s. 54F of the Act on account of capital gain arising on sale/transfer of shares for the house purchased by him one year prior to sale of such shares. The CIT(A) s order is accordingly set aside and the grounds raised by the assessee are allowed. 12. In the result, the appeal filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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