TaxTMI 
TaxTMI 
2012 (4) TMI 87
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.... of the Income-tax Act, 1961. 2. The assessee had sold one of her capital assets in the previous year relevant to the assessment year 2007-08, resulting in capital gains. The property was sold for a consideration of Rs. 34,73,447/-. The cost of acquisition was Rs. 1,25,000/- and indexed to Rs. 1,95,997/-. The long-term capital gains arising out of the sale was Rs. 32,77,450/-. 3. The assessee claimed exemption in her return of income on the long-term capital gains. The exemption was claimed as the assessee was proposing to construct a residential house property out of the sale consideration of the property. The exemption was thus claimed under section 54F of the Income-tax Act, 1961. 4. The assessee sold the property on 8-6-2006 an....
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....ough these circumstances were explained before the assessing authority, the claim of exemption made by the assessee under section 54F was rejected on the ground that the assessee has not constructed the residential house within the period of three years, which is mandatory as per the provisions of the Income-tax Act, 1961. In first appeal, the Commissioner of Income-tax (Appeals) explained all the facts of the case and acknowledged the fact that the assessee was prevented from constructing the proposed residential house. But, still he held that the conditions laid down in section 54F are mandatory and, as those conditions were not complied with by the assessee, exemption cannot be granted. The first appeal was thus dismissed. 6. The asse....
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....ays gives a remedy" Lex nemini facit injuriam -"The law does wrong to no one". 5. The learned CIT(A) ought to have considered the binding decisions of the jurisdictional High court and other ITAT decisions, namely: (a) Smt. Ranjeet Sandhu v Dy CIT, 36 II ITCL 657(chd); (b) Saraambal Kothari, 302 ITR 286 (Mad); (c) Seetha Subramaniam, 59 ITD 94; (d) Satish Chandra Gupta 54 ITD 508 and (e) Sahsi Varma CIT, relied on by the appellant and ought to have granted the well intended relief." 8. Shri N. Devanathan, the learned counsel appearing for the assessee, argued that the sale proceeds were straightaway utilized by the assessee in purchasing the landed property to construct a residential house and it was on that basis that exe....
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....ial house and, therefore, the assessee is not entitled for any exemption under section 54F. 10. We considered the matter in detail. The course of events in the present case shows that the assessee was really contemplating the construction of a residential house. This intention of the assessee is very clear from the fact that within days of the sale of her old property, the assessee had purchased the new site for constructing a residential house. The old property at Koyambedu was sold on 8-6-2006. The new landed property was purchased immediately on 5-7-2006. The events of sale and purchase and their proximity clearly demonstrate that the assessee had purchased the property at Nolambur Village only for the purpose of constructing a reside....
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....impossible to perform. In the present case, it was impossible for the assessee to construct the residential house within the stipulated period of three years. 12. Now, the question is whether the assessee is still entitled for the benefit of section 54F or not. 13. A dominant factor to be seen in the present case is that the entire consideration received by the assessee on sale of her old property has been utilized for the purchase of the new property. The purchase value of the property is more than the long-term capital gains taxable in the hands of the assessee. This fact is very crucial. The conduct of the assessee unequivocally demonstrates that the assessee was in fact proceeding to construct a residential house, based on which t....