TMI Blog2021 (12) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... will not amount to putting up construction and therefore the benefit of deduction will not be available to the assessee is a finding which is not necessary to be given in the appeal for AY 2015-16. The question whether the acquisition of flat by the assessee would amount to construction or purchase, is a issue which ought to have been left open by the CIT(A) for consideration in AY 2018-19. We leave this issue open for decision in Assessment Year 2018- 19. DR, however submitted that directions may be given to the AO, to take appropriate remedial action in Assessment Year 2018-19. We are of the view that it would be just and appropriate to make an observation that the AO will take appropriate measures as is open to the Revenue in law. With these observations, we allow the appeal of the assessee. Assessee appeal allowed. - ITA No.2324/Bang/2018 - - - Dated:- 6-12-2021 - Shri N.V. Vasudevan, Vice President And Shri B. R. Baskaran, Accountant Member For the Assessee : Shri. V. Srinivasan, Advocate For the Respondent : Shri. Sankar Ganesh K, CIT(DR)(ITAT), Bengaluru ORDER PER N. V. VASUDEVAN, VICE PRESIDENT: This is an appeal by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sale Consideration ₹ 5,10,00,000/- Less: Indexed Cost of Acquisition ₹ 13,67,336/- Gross Total income ₹ 4,96,32,664/- Less : Deduction u/s.54F ₹ 2,00,48,505/- Taxable Capital Gains ₹ 2,95,84,159/- 4. As submitted, in course of assessment proceedings, the AO called upon the assessee to furnish evidences in support of investment made in a new residential house property for claiming deduction u/s.54F of the Act. The assessee filed the copy of the registered agreement for purchase of a new residential flat at Mumbai, dated 09/05/2016 entered into with the developer M/s. Mayfair Housing Private Limited for a sum of ₹ 1,86,50,000/-. The assessee also gave the details of the other expenses incurred on payments made to thee builder, registration etc., and together with the aforesaid sum of ₹ 1,86,50,000/-, the total amount came to ₹ 2,00,48,505/-, which was claimed as a deduction. In course of the assessment proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osited 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 by which- ( a ) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause ( a ) or, as the case may be, clause ( b ) of sub-section (1), exceeds ( b ) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as 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 the unutilised amount in accordance with the scheme aforesaid. 6. As per provisions of Sec.54F(1) of the Act, the assessee can claim deduction while computing capital gain, if he either (i) purchases a residential house within 2 years from the date of transfer of the capital asset o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A). In so far as the first reason stated by the AO, i.e., the non deposit of the sale consideration received by the assessee in the capital gains account scheme is concerned, it was submitted that the assessee had deposited the sale consideration amounting to ₹ 3,05,00,000/- in the capital gains account scheme with Corporation Bank on 18/08/2015. A letter issued by the bank stating that amount was deposited in Capital Gains Account scheme was filed before CIT(A). It was argued that the denial of exemption u/s. 54F of the Act on the ground that the assessee has not made the deposit in the capital gains account scheme was misconceived and the same deserves to be vacated. 10. As far as the second reason given by the AO, viz., that the amount received has not been utilized for purchase of flat within a period of two years from sale of original asset, it was submitted that the assessee has made reinvestment in a new residential flat by entering into agreement with the Developer on 09/05/2016 for acquiring a (new residential flat and has also paid a sum of ₹ 1.86 Crores apart from incurring other expenses and there is no dispute on this score. It was submitted that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring into agreement with the Developer on 09/05/2016 would amount to construction of a residential flat and the assessee would get a period of 3 years from the date of transfer, the CIT(A) held that the flat was already constructed and occupancy certificate obtained on 29.6.2015 and completion certificate dated 16.3.2016 was also issued. Hence, the flat in question cannot be regarded as constructed by the assessee through a builder but has to be regarded as purchase of flat and the period of two of two years 2 years from the date of sale of the industrial lands i.e., 05/05/2014 would expire on 4.5.206 and since the flat was purchased on 9.5.2016, the assessee cannot avail the benefit of deduction u/s.54F(1) of the Act. 13. Aggrieved by the order of the CIT(A) in holding that the flat in question has to be regarded as purchase of residential property and not construction of residential property, the assessee is in appeal before the Tribunal. 14. We have considered the rival submissions. In our view, the admitted position is that in Assessment Year 2015-16, there was a transfer of capital asset resulting in accrual of long term capital gain. It is also admitted that the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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