TaxTMI 
TaxTMI 
2012 (7) TMI 431
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....by the competent authority, and that the assessee had failed to submit the copy of the design of the flat and layout of the project. 2(ii) On the facts and circumstance of the case and in law the Id. CIT(A) erred in allowing the claim of the assessee for exemption under section 54F ignoring the observation of the AO at para 3 on page 2 of the assessment order that the entire building was yet to be constructed though the assessee had paid full amount of Rs. 2.60 Crores. 2(iii) On the facts and circumstance of the case and in law the Id CIT (A) erred on allowing the claim of the assessee for exemption u/s 54F without insisting on the assessee to produce evidence of purchase or construction of a residential house within the period stipulated u/s 54F and erred in accepting the agreement for purchase dated 07.07.2007 as the evidence of purchase/construction of residential house when it was physical not in existence. 3. Ground number 1 regarding the exemption under section 54 EC of I T Act. 3.1 The assessee has sold his ancestral property on 13.12. 2006 for a consideration of Rs. 3, 40, 00, 000/-. The cost of the ancestral property was taken at nil therefore the entire consideration ....
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....e assessee under section 54 EC towards the investment made in REC bonds for a sum of Rs. 50 lakh out of total long-term capital gain of Rs. 3.40 crores. The Assessing Officer was of the view that once the exemption has been claimed under section 54F and the entire capital gain has not been utilised for the purchase of residential house, then the net consideration which is not appropriated by the assessee towards the purchase of new asset and also not deposited in the banks or institution as specified and notified in the official Gazette by the Central Government as per the provisions of sub section (4) of section 54F, the assessee cannot avail the exemption under section 54 EC. It is to be noted that it is not a case of availing double exemption on the same amount but the assessee has claimed exemption under section 54F as well as under section 54 EC for the respective amount of capital gain invested in purchase of new house and REC bonds. Wherever any such restriction is deemed fit, the legislature has provided in the statute a sufficient check under chapter VI-A of the Income Tax Act. As far as the claim of exemption under section 54F and under section 54 EC, there is no such res....
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....iginal asset in any long-term specified asset and such assessee takes any loan or advance on the security of such specified asset, he shall be deemed to have converted (otherwise than by transfer) such specified asset into money on the date on which such loan or advance is taken. [(3) Where the cost of the long-term specified asset has been taken into account for the purposes of clause (a) or clause (b) of sub-section (1),- (a) a deduction from the amount of income-tax with reference to such cost shall not be allowed under section 88 for any assessment year ending before the 1st day of April, 2006; (b) a deduction from the income with reference to such cost shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.] Explanation.-For the purposes of this section,- (a) "cost", in relation to any long-term specified asset, means the amount invested in such specified asset out of capital gains received or accruing as a result of the transfer of the original asset; [(b) "long-term specified asset" for making any investment under this section during the period commencing from the 1st day of April, 2006 an....
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....egarding exemption under section 54F: 7.1 Out of the total capital gain of Rs. 3.40 crores arising from sale of ancestral property, the assessee invested Rs. 2.60-crores for the purchase of 4 flats bearing number 9A,9B, 10A and 10 B. The assessee claimed exemption under section 54F against this amount of Rs. 2.60 crores invested towards purchase of flats; but the Assessing Officer allowed the exemption only in respect of one flat by holding that these are separate and independent residential units having separate kitchen and entrance; therefore, cannot be said as adjacent flats; even though the builder has referred them as composite unit. 7.2 On appeal the Commissioner of Income Tax(Appeals) allowed the claim of the assessee under section 54F in respect of the consideration of Rs. 2.60 crores towards purchase of 4 flats by following the decision of Special Bench of this Tribunal in case of ITO v. Ms Sushila M Jhaveri reported in 107 ITD 327. 8. Before us the ld DR has referred the grounds of appeal and submitted that at the time of purchase agreement dated 11.7,2007 these new residential houses were not physically in existence; therefore, when the flats were not constructed, the....