TaxTMI 
TaxTMI 
2013 (5) TMI 74
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....Briefly the facts are, the assessee an individual filed his return of income for the impugned assessment year on 31/07/2008 declaring total income of Rs. 5,73,76,170/- besides admitting agricultural income of Rs. 2,82,800/-. During the relevant previous year the assessee sold some residential flats belonging to him and derived long term capital gain of Rs. 85,10,009/-. The assessee also claimed exemption u/s 54 of the Act, towards payment of an amount of Rs. 84,00,000/- for purchase of 2 acres of land at Vattinagulapally to M/s Meenakshi Infrastructures a developer vide agreement of sale dt. 09/07/2008 for the proposed constructing a house. In course of the scrutiny assessment proceeding the AO noticed that the assessee has not constructed ....
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....acre each by duly earmarking some area towards passages and by virtue of lay out every purchaser would forgo some land for passages. After making the lay out the vendor developer has to obtain permission from HUDA to enable the assessee to construct a residential house. However, due to certain environmental issues the developer could not obtain permission for layout, as a result, no construction of the residential house could be made within the stipulated period. The learned counsel submitted that since the assessee was not able to construct the house within the period of 3 years as provided u/s 54 of the Act, the assessee offered the capital gain for taxation after the expiry of the 3rd year i.e. in the assessment year 2011-12. The learned....
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....riod of 3 years as per the provision contained u/s 54, the exemption claimed was rightly rejected. The learned Departmental Representative relied upon the following decisions: (i) R. Kalanidhi v. ITO [2010] 122 ITD 388 (Chennai). (ii) Smt. Shantaben P. Gandhi v. CIT 7. We have heard the rival submissions and perused the materials on record. The facts which are not disputed are that during the relevant assessment year the assessee derived long term capital gain of Rs. 85,10,009/- on account of sale of residential flat and at the same time the assessee claimed exemption u/s 54 of the Act of an amount of Rs. 84.00 lakh towards purchase of a land for constructing a residential house. Due to some reason or the other, the construction of....
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....e house by 8-7-2005. As per the proviso to section 54F, if the house is no so constructed within the stipulated period, then the capital gains which remain uninvested shall be charged u/s 45 as income of the previous year in which the period of three years expires. Thus, he has advanced the taxing of capital by more two years, i.e. in assessment year 2003-04. He was prompted to do so because he took up the assessment as late as in December, 2005/2006 and completed it on 27/01/2006. This does not permit him to go beyond the provisions of the Act and advance the taxing of the capital gain. Accordingly, we reverse the order of the CIT(A) and delete the addition of capital brought to tax by the Assessing Officer. The reliance of the learned Dep....