TaxTMI 
TaxTMI 
2011 (11) TMI 97
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....54F by depositing and surplus unappropriated fund into Capital Gain Scheme. 2. That the learned CIT (A) has erred in law and on facts by not appreciating the fact that the assessee had already appropriated the consideration towards purchase of flat and balance not appropriated fund was liable to be taxed as there was no scope for further investment when the assessee was already owing two residential properties in his name. 3. That the order of the learned CIT (A) being erroneous in law and on the facts deserves to be set aside and the order of the A.O. be restored." 2. A residential plot was sold by the assessee on 5th February, 2005 for a sum of Rs. 47,52,000/- on which net capital gain was shown at Rs. 24,43,364/-. Out of sale co....
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....allowable and deposited in capital gain deposit scheme will not be eligible to be exempted u/s 54F as the assessee had also acquired a new asset. According to the Assessing Officer, further requirement to make eligible such deposit u/s 54F is that the assessee should not purchase any residential house other than new asset within a period of one year construct any residential house other than new asset within a period of three years after the date of transfer of original asset and as the assessee was not having option to purchase or construct house as he owned one residential flat on the date of transfer of asset and had acquired new asset on 19th February, 2005, therefore, the capital gain was to be charged as per Section 54F (1)(b) and, in....
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....ubmissions in the light of the material placed before us. It will be appropriate to reproduce Section 54F:- 54F. Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.-(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, a residential house (here....
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....means 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. (2) Where the assessee purchases, within the period of 7 [two years] after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset, 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 such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-sect....
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....ication in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited 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 c....
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....he amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset. Proviso defines that in spite of such deposit if the said amount is not utilised wholly or partly for the purchase or construction of the new asset within the period specified then, how and when it can be taxed. Sub-section (1) of Section 54F grants exemption to the assessee from the long-term capital gain arising out of sale of any asset other than residential house and such exemption is granted to the assessee if he after the date on which the transfer took place has purchased or has within a period of three years after that date constructed a residenti....