9911796707
TMI Blog2021 (9) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT (A) be reversed and that of the Assessing Officer be restored. 4. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of appeal." 2. The assessee in the assessment year under consideration sold a property No.3BM/519, OMBR Layout Extension, Old Madras Banaswadi Road, Bangalore vide sale deed dated 19.10.2013 for a consideration of Rs. 3,15,00,000. The assessee intended to reinvest the entire consideration of Rs. 3.15 crores by purchasing a BDA site and construction of residential building on the said piece of land. Subsequently, the assessee being successful bidder in e-auction purchased a site No.2BC/805 in Sy.No.36/1, Benniganahalli Village East of NGF Layout, K R Puram Hobli, Bangalore measuring 2400 sq.ft. The assessee deposited the entire sale consideration of Rs. 1,59,62,400 and the BDA registered the site in favour of assessee vide sale deed dated 9.6.2014 and possession delivered on the same day. The assessee also incurred Rs. 10,53,879 as stamp duty and registration fees. The assessee inclined to construct a 3 floor residential building for his residential purposes. However, there was a litig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion even if not deposited in the Capital Gain Deposit Account. The CIT(Appeals) was of the view that the assessee is entitled for the deduction admissible u/s. 54 of the Act since a major portion of Rs. 1,70,16,279/- was invested in purchasing a site from the BDA which was locked-up in a litigation and only after finalization of such litigation the assessee was able to construct a building by investing the balance capital gain of Rs. 56,75,680/-. According to the CIT(A), the assessee in view of the litigation was prevented from construction of the building within the time limit, which should not be a ground for disallowance of deduction admissible u/s. 54 of the Act. Therefore the addition made by the AO amounting to Rs. 2,48,83,672/- was deleted by the CIT(Appeals). Against this, the revenue is in appeal before us. 5. The ld. DR submitted that the judgment of the Hon'ble High Court of Karnataka in CIT v. K. Ramachandra Rao (supra) held as follows:- "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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income on the long-term capital gains under section 54F of the Income-tax Act, 1961 as the assessee was proposing to construct a residential house property out of the sale consideration of the property. The assessee immediately after the sale purchased land to construct a house. The purchase price paid for the land was more than the long-term capital gains in the hands of the assessee on sale of her capital asset. But the assessee could not construct the proposed residential house in the land purchased by her as proposed due to an injunction order from the civil court. Even though these circumstances were explained before the assessing authority, the claim of exemption made by the assessee under section 54F was rejected on the ground that the assessee had not constructed the residential house within the period of three years, which was mandatory under the provisions of the Act. The Commissioner (Appeals) also did not grant exemption. On appeal: Held, allowing the appeal, that it was an accepted principle of jurisprudence that law never dictates a person to perform a duty that is impossible to perform. it was impossible for the assessee to construct the residential house wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct a new residential house. For this purpose, the assessee participated in the e-auction conducted by the BDA and purchased the property through eauction on 9.6.2016 for a consideration of Rs. 1,59,62,400 and after adding up the cost of registration, it worked out at Rs. 1,70,16,279. Later, the assessee was held up with the litigation of this property and there was delay in construction of new residential house. Litigation was over after the High Court judgment dated 5.11.2016 as narrated in para 2 of this order. Consequently the assessee obtained the building plan from BBMP on 26.5.2017. 9. While framing the assessment, exemption claimed by the assessee was denied since the assessee has not complied with the requirement of provisions of section 54 of the Act. However, the CIT(Appeals) allowed the claim of assessee u/s. 54 of the Act. Admittedly, the assessee has actually invested an amount of Rs. 1,70,16,279 in purchasing the residential site for for constructing a new residential house. To that extent, proportionate deduction to be granted to the assessee. However, the CIT(Appeals) granted deduction u/s. 54F of Rs. 2,48,83,672, though assessee has not deposited that portion in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
