TaxTMI 
TaxTMI 
2009 (8) TMI 825
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under section 54F of the Income-tax Act in respect of second property purchased by the assessee. In the cross-objection, the assessee has just supported the order of the CIT(A). 3. We have considered the rival contentions and found from the record that during the year under consideration, the assessee sold a piece of land for Rs. 1.20 crores which was purchased by him in the financial year 1989-90, which resulted into capital gains of Rs. 31.04 lakhs. A claim of deduction under section 54F was filed on the plea that subsequent to the sale of plot, the assessee purchased a piece of land for Rs. 30 lakhs and within six months thereafter again purchased another continuous plot of land for which he gave an advance of Rs. 5 lakhs on 25-10-20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....i). He further recorded a finding to the effect that Assessing Officer has not adduced any evidence that the second plot is not a continuous one and it does not constitute a land appurtenant to the building constructed within the statutory time-limit under section 54F of the Act. Aggrieved by this order of CIT(A), the revenue is in further appeal before us. 5. It was vehemently argued by the learned Sr. DR Shri Manish Gupta that provisions of section 54F are quite different from the provisions of section 54. As per learned DR, under section 54, the assessee is entitled for exemption of capital gains by investing the same in the building and land appurtenant thereto whereas under section 54F, the assessee is entitled for exemption only in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orities below and found from the record that the assessee has invested his capital gain on acquiring the new asset. There is no dispute with regard to investment of entire capital gains having been made during the permissible time-limit provided under section 54F. The only grievance of the Assessing Officer relates to claim of deduction under section 54F in respect of the second plot purchased on a different date which was adjacent to the first plot. 8. Learned DR had further fortified the action of Assessing Officer by drawing distinction between the provisions of section 54 and 54F of the Income-tax Act. 1961. For better understanding, the deductions enumerated under section 54 and 54F, it would be relevant to reproduce these provision....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,. . ." 10. It is crystal clear from the plain reading of section 54 & 54F that exemption is allowable in respect of amount invested in the construction of a residential house. There is no any rider under section 54F that no deduction would be allowed in respect of investment of capital gains made on acquisition of land appurtenant to the building or on the investment on land on which building is being constructed. When the land is purchased....
X X X X Extracts X X X X
X X X X Extracts X X X X
....even cost of land forming part of the residential unit on which no construction is done is also eligible for exemption under section 54F. Thus, the cost of vacant land appurtenant to and forming part of the residential unit is to be considered for claim of exemption under section 54F even if no construction has been done on the appurtenant land. The provisions of section 54 clearly provide for exemption if the net consideration received as a result of transfer of any capital asset, other than a residential house, is invested in the purchase or construction of a residential house. The new residential house is not debarred from having a land appurtenant to any size and it is also not the case of the Assessing Officer that the land appurtenant....