2012 (2) TMI 83

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.... supporting material and after due inquiry, therefore, the assessment order was claimed to be passed within the parameters of the law, that too, after due application of mind, therefore, invocation of revisional jurisdiction u/s 263 is against the provisions of the Act. Plea was also raised that the original order is neither erroneous nor prejudicial to the interest of the Revenue. It was also pointed out that failure to comply with the provisions of Section 54F would render its effect only after laps of three years and not at the stage of invoking revisional jurisdiction by the ld. CIT. A strong plea was raised that non-construction of the house was due to failure on the part of the coloniser to hand over the plot to the assessee. 3. On the other hand, the ld. CIT/DR strongly defended the invocation of revisional jurisdiction u/s 263 of the Act by the ld. CIT on the plea that till today, the house has not been constructed by the assessee and the prescribed limit of three years provided under the Act has already lapsed. It was strongly contended that the assessment order was very much prejudicial to the interest of the Revenue because it was framed without fulfilling the condition....

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.... 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 (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,-  (a)  if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ;  (b)  if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where-  (a)  the assessee,- (i)  owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii)  purch....

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....of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139 in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification 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 c....

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....construction of the house. At the same time, we are of the view that when language used in the Section is very much clear, no violence is permitted to the Legislation by the Courts, that too under the facts of the present appeal before us because the original return was filed by the assessee on 31.10.2006 and till the hearing of this appeal, no construction of the new asset has yet started. The Legislation in its wisdom has specifically provided the period of three years, therefore, it cannot be enlarged to indefinite period especially under the facts before us. The assessee though deposited Rs. 2,61,429/- with Omex Limited for purchase of plot before filing the return but the ownership of the plot was not transferred to the assessee even till date. Neither the Omex Limited gave the possession of the plot to the assessee nor any registration of the said plot was made in the name of the assessee. The exemption u/s 54F of the Act is available for investment for construction of a residential house, whereas though the assessee deposited the part of the consideration for purchase of the plot but till date, not to talk of construction even the possession of plot was not handed over to th....