TMI Blog2020 (1) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... is at ₹ 64.74 lakhs. Hon'ble High Court of Madhya Pradesh in the case of Smt. Shashi Varma [ 1996 (3) TMI 65 - MADHYA PRADESH HIGH COURT] has held that while allowing exemption u/s 54 of the Act, investment for acquisition of flat under the Scheme of DDA, where first instalment was paid, was much more than the capital gains, deduction is to be allowed as section 54 does not require that the construction of new house should necessarily be completed within two years where substantial investment is made in construction of house. Requirement of section 54 of the Act is for the assessee to have either purchased a residential house, being a new asset, within the stipulated period or construct a residential house within a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PER N.K. BILLAIYA, ACCOUNTANT MEMBER, This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - 16, New Delhi dated 19.03.2019 pertaining to Assessment Year 2013-14. 2. The sum and substance of the grievance of the assessee is that the CIT(A) erred in confirming the assessment thereby denying benefit of section 54 of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short]. 3. Representative of both the sides were heard at length. Case records carefully perused. 4. Facts emanating from the assessment order show that the assessee filed his return of income on 28.09.2013 declaring total income of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said property was purchased in the year 2001 for an amount of ₹ 18.50 lakhs and the assessee s share came to ₹ 9.25 lakhs which was indexed as per the provisions of law and indexed cost was taken at 18.50 lakhs. It was further explained that the said property was completed in F.Y. 2003 and total cost of construction was ₹ 43.50 lakhs. Taking his 50% share, cost of construction was taken at ₹ 21.73 lakhs and after indexation, it was at ₹ 40 lakhs. 7. The Assessing Officer asked the assessee to furnish details of expenses incurred towards completion of sold property amounting to ₹ 21.73 lakhs which was indexed at ₹ 43.50 lakhs. 8. The assessee furnished a documentary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction on part of the assessee In the year 2003, Thus indexed cost of construction / Improvement for the year under consideration comes out to be ₹ 32,35,465/- which is allowed while calculating capital gain. 2:6 Therefore, in view of the above discussion, capital gain from transfer of the property during the year under consideration by the assessee is calculated as under: Full value of consideration ₹ 1,10,00,000/- Less: Expenditure on transfer Rs, 1,05,000/- Less: Indexed cost acquisition ₹ 18,50,000/-- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost of improvement/ construction. 15. Before us, the ld. counsel for the assessee vehemently submitted that the assessee has already invested ₹ 64.74 lakhs towards cost of construction, which is much higher than the capital gain computed by the Assessing Officer at ₹ 58.09 lakhs. It is the say of the ld. counsel for the assessee that even if the computation of the Assessing Officer is accepted, then also, since the assessee has incurred more than the capital gains, he is eligible for exemption u/s 54 of the Act. 16. Per contra, the ld. DR strongly supported the findings of the Assessing Officer. It is the say of the ld. DR that the assessee is supposed to complete the construction of the house w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove that, some more money and total investment is at ₹ 64.74 lakhs. 20. The Hon'ble High Court of Madhya Pradesh in the case of Smt. Shashi Varma 224 ITR 106 has held that while allowing exemption u/s 54 of the Act, investment for acquisition of flat under the Scheme of DDA, where first instalment was paid, was much more than the capital gains, deduction is to be allowed as section 54 does not require that the construction of new house should necessarily be completed within two years where substantial investment is made in construction of house. 21. Requirement of section 54 of the Act is for the assessee to have either purchased a residential house, being a new asset, within the stipulated period ..... X X X X Extracts X X X X X X X X Extracts X X X X
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