TMI Blog2019 (9) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... achieving that purpose. The intention of the Legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of law. The words used in the section are purchased or constructed. The condition precedent for claiming benefit u/s 54F is that the capital gain should be parted by the assessee and invested either in purchasing a residential house or in constructing a residential house. Merely because the sale deed had not been executed or that construction is not complete and it is not in a fit condition to be occupied does not disentitle the assessee to claim section 54F relief If the construction was not completed within the prescribed period and the assesssee has invested the amount, therefore, the claim of the assessee is not liable to be declined u/s 54F of the Act. We are of the view that the claim of the assessee has wrongly been denied by CIT(A), therefore, we set aside the finding of the CIT(A) on this issue and allowed the claim of the assessee u/s 54F of the Act. Accordingly, this issue is decided in favour of the assessee against the revenue. - I.T.A. No.1061/Ahd/2017 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee also furnished the copy of sale deed. The assessee has also submitted the valuation report as on 01.04.1981 by a registered valuer namely Er. Girishkumar H. Shah. He also furnished copy of sale deed of land situated at Heritage Homes of ₹ 90,00,000/- in support of his claim u/s 54F of the Act. The AO was not satisfied with the report of valuation, therefore, called the DVO report who determined the cost of assets of ₹ 81,800/- as on 01.04.1981 and accordingly assessed the long term capital gain. The claim of the assessee u/s 54F of the Act was also denied being the purchased property was not the residential property and was not fully constructed and the total income of the assessee was assessed to the tune of ₹ 4,49,33,200/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who partly allowed the claim of the assessee but the assessee was not satisfied on the grounds raised above, therefore, the assessee has filed the present appeal before us. ISSUE No. 1 4. We have heard the Ld. Representative of the parties and perused the record. At the very outset, the Ld. Representative of the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have any right to redo the, similar action in another method. Accordingly, the enhancement made by the CIT(A) is deleted and grounds raised by the assessee are allowed . 5. The above mentioned finding has been given by Hon ble ITAT in the case of co-sharer of the land in which the assessee is also the co-sharer. The finding of the Hon ble ITAT is also applicable to the present case, because, the matter of controversy is the same, therefore, by honoring the decision of the co-ordinate bench, we decide this issue in favour of the assessee against the revenue. ISSUE NO.2 6. Under this issue the assessee has challenged the disallowance of deduction u/s 54F of the Act amounting to ₹ 96,31,350/-. The AO declined the claim of the assessee on the basis of this fact that the construction was not completed within the period of 3 years. The other factual things are not in dispute. The assessee purchased a plot no. 42(old survey no.266-1 and 266-2, 273) of heritage home of ₹ 96,31,350/- out of sale consideration received from the land. The appellant made the investment for the construction of a resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head Income from house property .] Explanation.-For the purposes of this section,- net consideration , in relation to the transfer of a capital asset, means the full value of the 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. (2) Where the assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head Income from house property , other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase may be, clause (b) of sub-section (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 in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and (//) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid. 7. Anyhow it is to be seen that the assessee is entitled to get the deduction u/s 54F of the Act amounting to ₹ 96,31,350/- in the specific circumstances when the construction has not been completed. In this regard, the matter of controversy has been adjudicated by Hon ble High Court of Gujarat in case Kishorbhai Harjibhai Patel V/s ITO (2010) 107 Taxman.com 294(Gujrat) in which it is specifically held that the claim u/s 54F of the Act is beneficial provisions and is applicable to the assessee when old capital assets is replaced by new capital assets in form-a res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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