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TMI Blog2019 (12) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 54 as per the provision of the Act. 2.2. That on the facts and circumstances of the case and in law, the CIT (A) has failed to understand the intention of the provisions of deduction available under section 54 i.e. for the investment/utilization of capital gain proceeds in another eligible property. 2.3. The CIT (A) has erred in law and facts in making the addition where the assessee has already invested Rs.l,14,51,375 in residential plot before filing of return and therefore utilized the entire capital gain and satisfying the condition of section 54 of the Act. 3. That the CIT (A) has erred in facts and in law in appreciating that the assesse could not get the possession of the plot, due to the reason beyond the control of the appellant, hence could not start the construction on the residential plot. Thus the appellant was prevented by sufficient cause for not starting the construction. However, the entire capital gain proceeds have already been utilized in purchase of the plot hence satisfying the conditions of section 54. 4. Without. prejudice, the CIT(A) and assessing officer have erred in facts and in law in failing to understand the provisions of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m capital gain. Against the assessment order, assessee appealed before the Ld. CIT(A) who vide his impugned order dated 04.10.2016 has dismissed the appeal of the assessee. Aggrieved the impugned order, assessee is in appeal before the Tribunal. 4. Ld. Counsel for the assessee stated that Ld. CIT(A) erred in confirming the addition made by the Assessing Officer aggregating to Rs. 81,66,515/- in the assessment order dated 02.03.2014 passed u/s. 143(3) of the Act and further submitted that Ld. CIT (A) has also failed to appreciate the provisions of section 54 of the Act and has made the addition ultra vires of section 54 of the Act. It was further submitted that the assessee has rightly claimed the deduction u/s. 54 of the Act. He further submitted that Ld. CIT(A) has failed to understand the intention of the provisions of deduction available under section 54 of the Act i.e. for the investment/utilization of capital gain proceeds in another eligible property. It was further submitted that Ld. CIT(A) has erred in making the addition where the assessee has already invested Rs. 1,14,51,375/- in residential plot before filing of return and therefore utilized the entire capital gain and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egate investment of Rs. 1,14,51,375 and details thereof as shown at page no. 39, 42 & 41 of the Paper Book) before the due date of filing Income Tax Return u/s. 139 of the Act for the purchase of another residential property at Green Bay Gold Village, Yamuna Expressway, Distt. Gautam Budh Nagar, UP. Construction on the said land could not be completed within the stipulated period of three years for the reasons beyond the control of the assessee i.e. Farmers agitation against Yamuna Authority related to the area in which plot was located, as seen from page 21-31 of the Paper Book and change of developer as Silverglades Pvt. Ltd. sold the project to other developer - Orris Infrastructure. In such circumstances, we are of the view that benefit of deduction cannot be denied to the assessee. Our aforesaid view is fortified by the ITAT, 'A' Bench decision dated 18.11.2019 passed in the case of Abodh Borar vs. ITO in ITA No. 5114/Del/2016 (AY 2013-14) wherein by respectfully following the ITAT, Delhi Bench decision in the case of Varun Seth vs. ACIT in ITA No. 1388/Del/2019 dated 14.05.2019 wherein, it has been held as under:- "6. We have heard the rival submission and perused the relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be disputed. This vital fact assumes great significance as assessee had taken all the steps to make the investment for the purchase of house, and also assessee had deposited Rs. 25,10,000/- in the capital gain account with PNB so as to construct the house. This unequivocally demonstrate that assessee really intended to construct the new residential house thereon. It was based on this bonafide intention assessee had claimed exemption under section 54 of the Act. Without the purchase of land, house could not have been constructed. The first step was to purchase the land, which was done. Thereafter the developer was to handover the plot, so that assessee could have constructed the house within time allowed of 2 years. However, no step could be put forward thereafter because possession of land was not given by the Developer, for reasons beyond the control of the assessee. If an assessee sells his house property and utilises the money for acquiring a plot for the construction of the house and if facts and circumstances point out that assessee intended to construct the house, which has been found so, then it is clear that he wants to avail exemption as provided under the law. Now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and more particularly when one is concerned with exemption from payment of tax. Considering the afore stated observations and the principles with regard to the interpretation of statute pertaining to the tax laws, one can very well interpret the provisions of section 54 read with section 2(47) of the Act, i.e., the definition of "transfer", which would enable the appellants to get the benefit under section 54 of the Act." 11. If we apply the law as clarified by the Hon'ble Apex Court, on the facts of the instant case, then we are of the opinion that the amount utilized by the assessee in the acquisition of land should be construed as amount invested in purchase/ construction of residential house. The intention of the statute as provided in section 54 has been fully satisfied by the assessee in the present case. Thus, on the facts of the present case, we hold that the assessee is entitled for exemption under section 54 of the Act and AO is directed to allow the exemption us/ 54." 7. Respectfully following the above decision which is applicable on the facts of the present case also, we hold that assessee is entitled to the exemption claimed by her and direct the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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