TMI Blog2020 (3) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... of requirement to claim exemption u/s. 54F, as per decisions relied upon by Ld.AR in case of CIT vs J.R Subramanya Bhat [ 1986 (6) TMI 7 - KARNATAKA HIGH COURT] and CIT Vs. Ramachandra Rao [ 2015 (4) TMI 620 - KARNATAKA HIGH COURT] assessee is eligible to claim exemption under section 54F. We therefore direct Ld. AO is directed to compute the capital gains considering claim in consonance to decisions of Hon ble Karnataka High Court mentioned herein. Whether additional deduction being construction cost incurred after filing the return of income but before expiry of 3 years from the date of sale of original assets land should be considered while computing exemption under section 54F even though assessee failed to claim it in the return of income? - HELD THAT:- It is observed that, as rightly argued by Ld. Sr. DR that, one has to verify the manner in which assessee invested in the vacant plot. Also, that this issue has not been considered by Ld.AO, and therefore in our view it is appropriate to set aside this issue back to Ld. AO. Needless to say, that assessee shall be granted proper opportunity of being represented in support of this claim. Accordingly, Additional ground rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w and on facts in not providing the additional deduction of ₹ 2,79,64,068/- being the construction cost incurred after filing the return of income and before expiry of three years from the date of sale of original asset. 2. Brief facts of the case are as under: Assessee is an individual and filed its return of income on 22/08/2015 declaring total income of ₹ 4,41,70,750/-. It was observed that, assessee declared income under the head income from salary, business and profession, capital gains and other sources. The case was selected for scrutiny and statutory notices were issued to assessee in response to which representative of assessee appeared before Ld. AO and filed replies dated 07/06/2017, 17/11/2017, 17/12/2017 and 11/12/2017. 3. During the course of assessment proceedings, from details furnished by assessee, Ld. AO observed that, assessee undertook sale and details of exemptions claimed u/s. 54F filed. It was observed that, assessee had claimed exemption to the tune of ₹ 3,84,00,000/- for construction of new residential house. Ld. AO observed that, assessee executed two sale deed dated 07/08/2014 and 07/01/2015 for sale of land. A portion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analysed for adjudicating the same. Ld. AR submitted that, additional grounds may be admitted in view of decision of Hon ble Supreme Court in case of CIT vs National Thermal Power Corporation reported in 229 ITR 383 and Jute Corporation of India Ltd., vs CIT reported in 187 ITR 688. On the contrary, Ld. Sr. DR objected for admission of the same. We have perused submissions advanced by both sides in light of records placed before us. 9. Admittedly in order to adjudicate additional grounds, no new facts need to be investigated upon. It is also observed that, this issue was discussed by assessee in written submission filed before authorities below though a specific ground was not raised, we therefore do not find any reason, not to admit these grounds. Accordingly, the additional grounds raised, reproduced hereinabove are admitted. All grounds raised by assessee as well as revenue intermingle with each other and are interconnected, we therefore dispose them all together. 10. Ld. AR submitted that, assessee sold two parcels of land for price of ₹ 8,16,55,200/- one on 07/08/2014 and other on 07/01/2015, both near Kempegowda International Airport, which he was acq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see purchased site for a consideration on 20/12/2012 and constructed the house on the site and claimed section 54F of the Act. The sales of capital asset giving rise to capital gains were made on 07/08/2014 and 07/01/2015. Ld. CIT(A) also held that, land purchased more than one year prior to the date of transfer of capital asset is not eligible, whereas assessee submitted that, land purchased even one year prior to the transfer of capital asset is eligible, by relying upon decision of Hon ble Madras High Court in case of CIT vs Aryamma Sundaram reported in 407 ITR 1, wherein Hon ble court answered following question in favour of assessee which reads as under; Whether in computation of cost of new asset completion in section 54 (1) of the income tax act, the cost of land can be segregated from the cost of constructed house property? 14. Ld. AR placed reliance upon decision of coordinate Bench of this Tribunal in R. M. M. Athreya vs ITO in ITA No. 467/B/2013 (placed at page 54 to 62 of paper book) and decision of this Tribunal in case of GopiLal Laddha vs ACIT reported in 62 SOT 59. On the contrary, Ld. Sr. DR placed reliance upon orders passed by authorities below. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dential house. 17. In the present facts of case assessee utilised part of sale consideration earned from sale of 2 parcels of land in construction of residential house, which started on 13/01/2014 (which is within one year prior to the sale of capital asset) and, construction was completed in financial year 2016-17 (which is before expiry of 3 years from the sale of capital asset). Admittedly assessee has used sum of ₹ 3,99,99,067/- towards construction of new asset and balance has been offered to tax. 18. Under these circumstances, we do not find any violation of requirement to claim exemption u/s. 54F, as per decisions relied upon by Ld.AR in case of Hon ble Jurisdictional High Court in case of CIT vs J.R Subramanya Bhat (supra) and CIT Vs. Ramachandra Rao (supra), assessee is eligible to claim exemption under section 54F. We therefore direct Ld. AO is directed to compute the capital gains considering claim in consonance to decisions of Hon ble Karnataka High Court mentioned herein. Accordingly ground 1 2 of assessee s appeal stands allowed whereas revenue s appeal stands dismissed. 19. So far as 3rd issue raised by assessee in ground No. 3-4 by way of additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
