TMI Blog2022 (12) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim to the extent of investment of sum of Rs. 78,60,000/- in first property and the investments in two other properties have not been pressed for exemptions. Admitted case of assessee that income had accrued in FY 2014-15 and after the developer got approved zonal plan, the assessee obtained physical possession of the plot vide letter dated 18.08.2022 and though before that the assessee got approved the construction plan by making application with competent authority. However, construction has not begun. There is no evidence of any construction activity or of the fact that assessee has invested the proceeds in statutory deposits and then spent any proceeds of the sales consideration of two properties he had sold, into the construction over this plot. Thus the property in which part investments of capital gains was done continued to be plot for all purposes and intent, for the assessee in the period when construction was to atleast to be started, if not completed. That being so, there is no error in the determination of issue against the assessee by Ld. tax Authorities below and no merits in the grounds as raised here. The appeal is dismissed. - ITA No. 1060/Del/2020 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o construct residential house on these plots within the prescribed time period. However, the assessee claimed having invested the requisite amount in financial year itself fulfilled the conditions of Section 54. 5. The Ld. CIT(A) observed that the fact remains that the appellant could not complete the construction of residential houses upon the said plots within specified period of three years as the investment was made by the appellant in the plots which were not having approvals from the concerned government departments for the construction ab initio. The citations of law relied by the Ld. AR of the appellant were distinguished. It further observed that alternate plea of the ld. AR that disallowance, if any of this account, could have been made only in the previous year in which period of three year from the date of transfer of original asset expires as provided u/s 54/54F of the Act has been considered. However, the facts of the present case are not covered by the provisions of Section 54(2)/54F(4) of the Act as the investment made in the plots was not found eligible for claim of deduction u/s 54/54F of the Act ab-initio . 6. Accordingly the appeal was dismissed and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d period of three years expired and the same could not have been made in the year under consideration. 7. That each of the above grounds is independent and is without prejudice to each other. 8. That under the facts and circumstances of the case, Ld. A.O. has erred in charging u/s 234A, 234B, 234C and 234D. 9. That appellant craves to add, alter, delete or modify any or all of the grounds of appeal on or before the hearing of the appeal. 7. Heard and perused the record. 7.1 On behalf of the assessee Ld. AR submitted that the Ld. CIT(A) had called for remand report to which rejoinder was filed. It was submitted that the admitted facts are that the developer by letter dated 07.04.2017 had informed the assessee that he has applied for zoning plan of the plot and the same was still under consideration before the concerned department and without approval of zoning plan the assessee was given option to take possession. It was submitted that Ld. CIT(A) has wrongly concluded that it is a case where the developer was not having necessary approval from the government to construct residential units and that it is not a case that assessee was not offered possession. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he previous year in which the period of three years expires from the date of transfer of long term capital asset. Ld. AR submitted that this proviso makes it ample clear the only unutilized amount can be brought to tax and not the amount utilized. He relied judgments Smt. V.A. Tharabai vs. DCIT [2012] taxmann.com 276 (Chennai) ; R.S.Sharma vs. ITO, Bangalore [2015] 55 taxmann.com 187 (Karnataka) ; Mrs. Seema Sabharwal vs. ITO (ITA No. 272/CHD./2017) ; CIT vs. Kuldeep Singh {2014} 49 taxmann.com 167 (Delhi) to contend and support his arguments that by purchase of plot and payment of complete consideration assessee established intention to construct the residential property. 8. On the other hand, Ld. DR submitted that there is no error in the findings of Ld. Tax Authorities below. 9. Giving thoughtful consideration to the submissions it can be observed that section 54 gives a window period of three years, from the date of transfer of original asset, for the construction of a new house and two years for purchasing a new house. Further as per the section the amount utilized for the said purpose along with the amount deposited in a specified bank account for the purpose, before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set, is sufficient compliance. It has been held by various courts that in such circumstances the assessee is entitled to claim exemption despite the fact that the construction is not completed within three years. This issue was addressed by the Delhi High Court in the case of CIT v. R.L. Sood [2000] 245 ITR 727/108 Taxman 227, wherein the Hon ble High Court held that the assessee has invested a substantial amount in the purchase of a new asset, thus acquiring substantial domain over the new flat within the specified period, the assessee could be said to have complied with the requirement of section 54 and merely because possession of the Flat was not handed over to the assessee within the specified period the said benefit could not be denied. 10.4 In Balraj v. Commissioner of Income-Tax [2002] 254 ITR 22(Del) it is held that for the purpose of attracting the provisions of section 54 of the Income-tax Act, it is not necessary that the assessee should become the owner of the property. Section 54 of the said Act speaks of purchase. 11. Thus the objective of Section 54 is that the capital gains to be reinvested in another residential house. The provision emphasizes the investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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