2014 (7) TMI 297

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nd received sale consideration of Rs. 61,06,000. In the return of income the assessee admitted nil income under the head "income from long term capital gains" after claiming exemption u/s. 54E for Rs. 25 lakhs and u/s. 54F for Rs. 35,02,451, from the long term capital gains computed of Rs. 60,02,451. 3. In the assessment completed u/s. 143(3) on 29.12.2008, the AO computed the long term capital gains at Rs. 60,69,829 and allowed only exemption u/s. 54E for Rs. 25 lakhs. The AO disallowed the claim u/s. 54F on the reason that the following work was pending in the ground floor of the building: (a) Electrical work is partly completed, main door and other switch boards are yet to be fixed. (b) Though plastering is completed painting is....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ribed u/s. 54F(2) of the Act, the ITAT directed the AO to examine the facts whether the amount of Rs. 2.5 lakhs paid on 14.10.2005 and Rs. 25 lakhs paid vide cheque No. 9.12.2005 by the assessee are for acquisition of the flat or not and to decide the issue in the light of the order of the Tribunal in the case of Jagan Nath Singh Lodha vs. ITO (85 TTJ 173) (Jodh). 8. Consequent to the order of the ITAT, the AO called for details and the same was submitted by the assessee. The AO denied the deduction u/s. 54F and computed the total income of Rs. 37,10,994 vide consequential order dated 12.10.2012 by holding as under: " ... Accordingly, the opportunities of being heard was given to the assessee. In response the assessee's AR Sri P. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....turned and an amount of Rs. 50,000 was forfeited towards cancellation charges. Later, the assessee herself had constructed the house. The CIT(A) held that it is clear that the intention of the assessee from the very beginning was to purchase a flat but could not do so due to various reasons and the assessee ultimately constructed her house within a period of three years of the transfer of the original asset and complied with the provisions of section 54F of the Act. The CIT(A) pointed out that the ITAT Jodhpur Bench in the case of Jagan Nath Singh Lodha (supra) has held as follows: " ... The intention of the assessee from the very beginning was to purchase a flat. When due to certain unavoidable circumstances, the contract did not materi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....claimed by the assessee. 3. The learned CIT(A) ought to have considered the fact that the assessee was under obligation to deposit capital gain before filing of the return and enclose the receipt to the return of income. 4. The learned CIT(A) ought to confirmed the disallowance of deduction u/s. 54F as the construction of the house was not completed within three years from the date of transfer of original asset. 12. We have heard both the parties. We find the ITAT at para 16 of its order dated 20th July, 2012 in the first round of appeal in assessee's own case has clearly directed the AO to examine the fact whether the amount paid is for acquisition of flat or not and to decide the issue in the light of the order of the Tribunal in....