9911796707
Advanced Search 
TMI Blog2020 (1) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 Rs. 8.90 lakhs. Return was selected for scrutiny assessment through CASS and, accordingly, statutory notices were issued and served upon the assessee. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has computed his income declaring capital gain as under: Full value of consideration Rs. 1,10,00,000/- Less : Expenditure on transfer Rs. 1,05,000/- Less : Indexed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - per sq. metre. Not satisfied with this evidence, the Assessing Officer again asked the assessee to substantiate the claim for cost of construction /improvement with supporting evidences. 9. On receiving no plausible reply, the Assessing Officer computed the capital gain from transfer of the property as under: "In such circumstances cost of construction/ improvement claimed by the assessee in his computation of capital gain is not fully allowable. However, it is 'observed from the sale deeds of properties that the property, when it was purchased has covered area of 60.14 sq, motor only and when it was sold it has covered area of 439.06 sq, motor, Therefore, this fact cannot be denied that the assessee has made construction after acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption u/s 54 of the Act. The assessee replied that construction is going on, on the said plot. Accordingly, an Inspector was deputed by the Assessing Officer for physical verification and in his report, the Inspector submitted that construction is still going on and is not yet completed. 12. The Assessing Officer was of the firm belief that since the property was sold on 07.05.2012, the assessee should have completed the construction by 07.05.2015, and since no construction was completed within three years, the Assessing Officer denied exemption u/s 54 of the Act and made addition on long term capital gain at Rs. 58,09,535/-. 13. The assessee carried the matter before the ld. CIT(A) but without any success. 14. The first appellate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of section 54 is required to be considered, it is envisaged in the statutory provision that the house to be constructed at that stage might be under construction and capital gain at that time not only appropriated or utilised. It is, therefore, not correct to insist that the assessee should establish that residential house is complete and then ask for benefit u/s 54 of the Act. What is required under the section is that the assessee should take steps to make investment in a residential house. Thus, emphasis is on the utilisation or investment of capital gain in construction of residential house. 19. Considering the facts of the present case, claim of the assessee is that he had invested full sale consideration, and over and above t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exemption u/s 54 of the Act. 24. However, since no documentary evidences have been furnished and only a claim has been made, we deem it fit to restore the issue to the file of the Assessing Officer. The assessee is directed to demonstrate that he has already invested Rs. 64,74,946/- towards construction of house and the Assessing Officer is directed to examine the documentary evidences and if found correct, allow benefit of section 54 of the Act. With the above directions, the grounds of appeal raised by the assessee are allowed for statistical purposes. 25. In the result, the appeal filed by the assessee in ITA No. 4647/DEL/2019 is treated as allowed for statistical purposes. The order is pronounced in the open court on 06.01.2020. X X X X Extracts X X X X X X X X Extracts X X X X
|
