TaxTMI 
TaxTMI 
2013 (1) TMI 290
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....ion of the sale proceeds before the date of filing of return as there is proof that the assessee started construction only in the F.Y.2008-09. ii) The learned CIT(A) erred in concluding that the construction of the house was completed before the date on which the assessee filed his return i.e. on 6/11/2008 on the belief that the second permission from the Gram Panchayat was obtained to complete the house and not to begin the construction of the house. iii) The learned CIT(A) erred in not appreciating the fact that the assessee obtained permission from the Gram Panchayat for house construction only on 8/7/2008 and no construction can start before obtaining permission from the statutory authorities.....
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....t. Thereafter, return of income was filed on 6/11/2008 declaring a total income of Rs.1,69,088/- under the head "long term capital gains". The assessee declared an income of long term capital gains of Rs.1,69,039/- on the sale of land amounting to Rs.52,00,000/- after claiming an exemption of Rs.48,14,186/- under section 54F of the Act. The assessment order was completed under section 143 rws 147 of the Act vide order dated 10/12/2010 wherein the claim of exemption under section 54F of the Act was denied by the Assessing Officer. The Assessing Officer held that the assessee had not completed the construction of the house before the time stipulated under section 139(1) nor had he completed the construction before filing the return belatedly ....
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....bsp; (a) "Capital gains arose on 4.5.2006 for F.Y.2006-07 relevant to assessment year 2007-08. (b) The appellant started construction of the house by obtaining permission from the Gram Panchayat on 9/10/2006 by submitting application on 27/9/2006. (c) The house was constructed within three years from the date of sale of the original property. (d) The Assessing Officer herself has certified that the house was completed by 26/3/2009 even if it was not completed by 6/11/2008. (e) As much as Rs.49,17,000/- was invested by the date of filing of the return as against the total investment of Rs.55,43,750/- as per the valuation report from the Civil Engineer, ex....
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....jor portion amounting to Rs.49,17,000/- out of the total investment of Rs.55,43,750/- was invested much before 6/11/2008, the date of filing the return. Since the appellant had furnished details before the ADIT and the Assessing Officer, about the house construction and they did not have more than one house as on that date, they were entitled for claiming deduction under section 54F since the entire amount was invested before the time allowed under section 139 though not before the time allowed under section 139(1), in view of the Hon'ble jurisdictional Tribunal judgment cited by the appellant in the case of Nipun Mehrotra v ACIT - 297 ITR (AT) 110 (2008), Bangalore Bench. In view of the same, following the Hon'ble jurisdictional Tribunal j....
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....e mentioned case held that it is sufficient for the assessee to utilize the capital gains for the purchase of a flat before the extended due date under section 139(4) of the Act. The relevant finding of the Hon'ble jurisdictional High Court in the case supra reads as follows:- "The section 54(1) declares that when the assessee sells any long term capital asset, the assessee should purchase the building within one year before the transfer or within two years after the transfer by investing capital gains. In which event the assessee will not be liable for capital gain tax. The section 54(2) declares that within one year from the date of transfer if the capital gain is not invested in purchase of bui....