2012 (4) TMI 401

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....95 for a consideration of Rs. 95 lakhs. In filing her return of income, the assessee claimed exemption under section 54 and returned a total income of Rs. 4,56,710/-. The claim of deduction under section 54 was rejected by the assessing authority and the income was determined at Rs. 81,60,000/-. The matter was taken up before the Income-tax Appellate Tribunal. The Tribunal remitted back the file to the Assessing Officer to consider the issue of disallowance under section 54 after giving a finding on the genuineness of the claim of the assessee that she had given advances towards purchase of a property to construct a residential house. The Tribunal also directed to re-examine the question of setting off of short-term capital loss arising on ....

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....the new property and that the same was not complete because the property was neither constructed by those persons nor the advances were returned in time. Ultimately, the Assessing Officer found that the construction of the property was completed only during 2001-02 and as such the assessee had not purchased any residential house either one year prior or two years after the date of transfer and also no residential property was constructed within three years from the date of transfer. The deduction was denied. 8. The case of the assessee is that the assessee was prevented from depositing the sale proceeds in the capital gains account, as she had advanced the money with an intention to purchase a property. The advances were made to Shri K.R....

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....es of the Tribunal in extending the benefit of deduction available under section 54 even when the conditions were complied with by the assessee beyond the prescribed period. But, in such cases the assessees could not have satisfied the conditions by performance, as the assessees were prevented by sufficient reasons. The assessees were prevented from performing the conditions by virtue of supervening impossibilities, either by way of judicial restraint or by any other cogent reasons beyond the control of the assessee. 12. In the present case, the constraint stated by the assessee is that the advances given by her to acquire the property were not returned to her in time, nor property was acquired. As pointed out by the Assessing Officer, t....