TMI Blog2004 (11) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... that neither the new house has been constructed within the prescribed period nor sale proceeds of old house utilised for construction of new house nor the capital gain therefrom was kept in a specified deposit before the scheduled date." 3. The facts indicate that in this case when the investment in the house property (Honey Cottage, R.B. Jodhamal Road, Hoshiarpur) was being examined, it was explained that the major part of funds had come from sale of old house situated in Bahadurpur, Hoshiarpur. It was claimed that the house belonged to HUF during the investigation conducted by the Investigation Wing officials. Later on, before the AO, it was admitted that it was not HUF property and that it was the property of Shri S.C. Sood (Individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter in appeal and it was submitted before the first appellate authority that the assessee had utilised capital gains in the construction of new house of which he was 1/3rd co-owner and, therefore, no capital gains was chargeable to tax as per s. 54 of the IT Act. It was pointed out that the sale proceeds were deposited in fixed deposit with Indian Bank and loans were raised against FDRs, which were invested in the house property as admitted by the AO. It was pointed out that the amount was kept in the FDRs to earn more interest. It was further pointed out that fixed deposit account was closed on 23rd Feb., 1994 by adjustments of loans as per the certificate dt. 2nd Nov., 1997 of the bank. Further, it was argued that the capital gain shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without appreciating the settled position of law gravely erred in disallowing the assessee's entitlement to exemption of long-term capital gain as contemplated under s. 54 of the Act, on the ground that the assessee was not the owner of the said residential house in entirety/toto and was only a co-owner in the said house. So reliance was placed on the decisions of the Hon'ble Gujarat High Court in the case of CIT vs. Chandanben Maganlal (2000) 162 CTR (Guj) 542 : (2000) 245 ITR 182 (Guj), Madras High Court in the case of CIT vs. Madras Cricket Club (1934) 2 ITR 209 (Mad), Rajasthan High Court in the case of Saiffuddin vs. CIT (1985) 48 CTR (Raj) 197 : (1985) 156 ITR 127 (Raj) and Hon'ble Supreme Court in the case of CIT vs. Podar Cement (P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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