https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=434759 https://www.taxtmi.com/caselaws?id=434759 Exemption u/s 54/54F - property comprising land and building at Chennai has been acquired by Chennai metro Rail Ltd u/s. 194LA - said property has been acquired by the assessee in the year 1987 and further made a construction in the year 1997 and assessee had also purchased new residential house property - HELD THAT:- As it is very clear that property transferred by the assessee by way of compulsory acquisition by Chennai Metro Rail Ltd is a long term capital asset, which is eligible for the benefit of exemption u/s. 54 of the Act. Although, there is a dispute with regard to the nature of property, whether it is commercial or residential, the assessee has filed relevant evidences to prove that said property was a residential house property and income from which is assessable under the head income from house property. Therefore, we are of the considered view that the assessee is entitled for exemption u/s. 54 of the Act towards capital gains derived from transfer of capital asset. Amount of exemption claimed by the assessee and further whether the assessee has satisfied the conditions prescribed u/s. 54 - In this case, there is no dispute with regard to the fact that the house property purchased by the assessee on 30.08.2012 is having a multiple units, which is one a residential house property. Therefore, we are of the considered view that, the assessee is entitled for exemption u/s. 54 - In so for as the observations of the AO with regard to the purchase of another residential house property on 12.12.2013 in light of provisions of section 54F we find that the observations of the AO is devoid of merits, because the assessee never claimed exemption u/s. 54F of the Act, but has claimed exemption u/s. 54 of the Act. Therefore, we reject the observations of the AO. We are of the considered view that exemption claimed u/s. 54 of the Act, in respect of purchase of new residential house property on 30.08.2012 is in accordance with law and the assessee has rightly claimed exemption after satisfying conditions prescribed therein. Therefore, we direct the AO to allow exemption claimed u/s. 54 of the Act, in respect of purchase of new residential house property and construction thereon. Exemption claimed u/s. 54EC - As we find that the assessee has made a normal fixed deposit of Rs. 25 lakhs each in two nationalized banks. Although, the assessee has made fixed deposits on or before due date for filing return of income u/s. 139(1) of the Act, but fact remains that in order to get the benefit u/s. 54EC of the Act, the assessee should invest the amount of capital gain in eligible bonds. In this case, the assessee has made investment in normal fixed deposits. In our considered view, said investment does not quality for exemption u/s. 54EC of the Act. Thus, we upheld the findings given by the ld. CIT(A) in rejection of exemption claimed u/s. 54EC of the Act. Appeal filed by the assessee is partly allowed. Case-Laws Income Tax Tue, 28 Feb 2023 00:00:00 +0530