TMI Blog2020 (10) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be denied the benefit of exemption u/s 54F merely because he had not deposited the amount in specified bank account as stipulated. At the time of hearing before us, even the ld. DR has not been able to raise any material contention to doubt or dispute this legal position clearly propounded. As contended that the claim of the assessee of having invested the amount of net consideration in the construction of the new house within the stipulated period of 3 years from the date of the transfer of the original assets has not been verified either by the AO or by the ld. CIT(A).- We find merit in this contention raised by the ld. DR and since ld. Counsel for the assessee has also not raised objection for sending the matter back to the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was noticed by the Assessing Officer that the due date for filing of the return of income by the assessee for the year under consideration was 31.07.2011 and since no investment was made by the assessee in the construction of house till that date, he was required to deposit the amount of net consideration which had remained unutilized in the specified bank account as per the provisions of subsection (4) of section 54F of the Act. Since no such deposit was made by the assessee in the specified bank account as required by the provisions of subsection (4) of section 54F of the Act, the claim of the assessee for exemption u/s 54F was disallowed by the Assessing Officer in the assessment completed u/s 143(3) of the Act vide an order dated 20.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch construction was ongoing since 1 year prior to the transfer of old asset and hence, the new asset was already ongoing on the date of transfer. This new asset was to be taken as eligible asset u/s 54F. In this context the High Court held that it was not the intent of the assessee to retain cash, but to invest in construction or purchase of such property and if such investment is made within the period stipulated therein, then section 54F(4) is not at all attracted . The peculiars facts of the case before the Karnataka High Court place the issue on an entirely different footing. In the case of the appellant there was no ongoing construction and hence, the Karnataka High Court judgment is distinguishable on facts. Therefore, it is hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s similar to the one involved in question no.2 that was raised before the Hon ble Karnataka High Court and the same was answered by their Lordships in paragraph no.4.1 as under :- 4.1 Re.Question No.2 : As is clear from Sub Section (4) in the event of the assessee not investing the capital gains either in purchasing the residential house or in constructing a residential house within the period stipulated in Section 54F(1), if the assessee wants the benefit of Section 54F, then he should deposit the said capital gains in an account which is duly notified by the Central Government. In other words if he wants to claim exemption from payment of income tax by retaining the cash, then the said amount is to be invested in the said accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Assessing Officer to verify this claim of the assessee. We find merit in this contention raised by the ld. DR and since ld. Counsel for the assessee has also not raised objection for sending the matter back to the Assessing Officer for the limited purpose of such verification, we restore this issue to the file of the Assessing Officer with a direction to allow the claim of the assessee for exemption u/s 54F of the Act after verifying the actual amount of investment made by the assessee in the construction of new house within the stipulated period of 3 years from the date of transfer of the original assets. 8. In the result, the appeal of the assessee is treated as allowed as indicated above. Order pronounced on this 22nd day o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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