TMI Blog2022 (7) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order passed u/s 143(3) of the Income Tax Act, 1961(in short the Act ) dated 27.12.2017. The assessee in this appeal has taken the following grounds of appeal: 1. That in the facts and in the circumstances of the case and in law, the Ld. CIT(A)- 10 was not justified in not deleting a sum of Rs. 9933057/- being the amount wrongly included by the appellant under the head capital gain, while filing return of income whereas as per section 54F no amount is liable to be taxed. 2. The appellant craves leave to add/alter or modify any grounds of appeal at hearing stage. 2. Brief facts of the case are that the return of income was e-filed by assessee on 25.08.2015 declaring total income of Rs. 1,01,41,590/-. The case of the assessee was selected for scrutiny through CASS. Accordingly, notice u/s 143(2) 142(1) of the I.T. Act, 1961 were issued to assessee, in response to the same, the ld. AR appeared and submitted balance sheet, profit and loss account and the details as requisitioned in notice. 3. During the course of assessment proceedings, it was observed that the assessee has realized capital gain of Rs. 2,15,90,819/-. The calculation of which is as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid computation of gross capital gain of Rs.2,15,90, 819/- is neither disputed by the Ld. AO or the appellant. Against the gross Long Term Capital Gain, the appellant had claimed deduction of Rs.1, 16,57,762/- u/s 54F of the Act and accordingly declared the net taxable capital gain of Rs.99,33,057/- in the return of income. It was the appellant's case that her case fell within the ambit of Section 54F(a) and that since cost of new asset was not lower than the actual sale proceeds; the appellant was entitled to deduction of Rs.1,16,57,762/-. The Ld. AO in her impugned order was however not agreeable to the manner of computation of the deduction u/s 54F of the Act. Accordingly the Ld. AO the net consideration for thee purposes of Section 54F ought to be the deemed stamp duty value of Rs.10,46,60,259/- substituted for the full value of consideration u/s 50C and not the actual proceeds of Rs.1,00,00,000/- received by the appellant. Hence, the Ld. AO concluded that the case of the appellant fell under Section 54F(b) and hence worked out the proportionate deduction at Rs.24,04,928/- as opposed to Rs.1,16,57,762/- claimed by the appellant thereby resulting in net addition to the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to the extent of actual investment of Rs 24,60,000 in the new house property. Per contra, the contention of the assessee is that where the whole of the actual sale consideration of Rs 24,60, 000 has been invested in the new house property, the whole of the capital gains, even though worked out in terms of section 50C of the Act, would be eligible for deduction under section 54F of the Act and the assessee is not liable to pay any capital gains tax. 10. To appreciate the issue under consideration, we refer to the provisions of section 54F which reads as under: 54F. (1) Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date Constructed, one residential house in India (hereafter in this section referred to as the net asset), the capital gain sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the net Consideration is fully invested in the new asset, the whole of the capital gains shall not be charged under section 45 of the Act. The net consideration for the purposes of section 54F has been defined as the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. In other words, the consideration which is actually received or accrued as a result of transfer has to be invested in the new asset. In the instant case, undisputedly, the consideration which has accrued to the assessee as per the sale deed is Rs 24,60,000 and the whole of the said consideration has been invested in the capital gains accounts scheme for purchase of the new house property which is again not been disputed by the Revenue. The consideration as determined under section 50C based on the stamp duty authority valuation is not a consideration which has been received by or has accrued to the assessee. Rather, it is a value which has been deemed as full value of consideration for the limited purposes of determining the income chargeable as capital gains under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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