TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 52
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....the department had no objection in condoning the delay. The delay is condoned and the appeal is admitted. 3. Facts apropos are that the assessee a salaried individual had filed his return of income for the assessment year : 2009-10 declaring an income of Rs. 2,98,718/-. During the course of assessment proceedings, the AO noted that the assessee had sold a property bearing plot no.506, situated at Hosur Sarjapur Road Layout, Bangalore alongwith semi finished building therein for a sum of Rs. 66,50,000/-. The conveyance deed was executed on 15-04-2008. However, assessee did not show any capital gains in his return of income. Explanation of the assessee was sought. Reply of the assessee was that the entire sum of Rs. 66,50,000/-realized on sale was given by him to his brother Shri T.Vijayakumar for acquiring a house bearing No.199, 12th Main , 4th Block, Koramangala, Bangalore-560 034. The payments to his brother Shri T.Vijayakumar, were through a cheque dated 19-04-2008 for Rs. 64,18,225/- and balance sum of Rs. 5,21,775/- in cash. Submission of the assessee was that the transaction did not go through since his brother was reluctant to go through the deal as his family members were ....
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....ation of agreement entered by the assessee with Mrs. Mary Susan, he had utilized the refund received from Mrs. Mary Susan for purchasing a flat in Sobha Garrison Project, Yeshwanthpur Hobli, Bangalore North through agreement dated 24-03-2011 from M/s Sobha Builders. Argument of the assessee was that even this investment would qualify for claim of exemption u/s 54F of the Act. However, the CIT(A) was not impressed by the above argument. According to him, the original agreement stated to have been entered with Shri T.Vijayakumar did not create enforceable right in favour of the assessee. According to learned CIT(A), assessee had given the money to his brother for helping the latter to acquire a BDA site. When the site was sold by Shri T.Vijayakumar, after two years, he had returned the money. Further, as per the learned CIT(A), the documents produced in support of the transaction with Mrs Mary Susan were also not reliable. As per the learned CIT(A) the condition in the said agreement that cheque given by the assessee could be encashed only after completion of the residential building appeared contrary to vendors assertion that she selling due to paucity of funds. Even the agreement e....
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....Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date 3[constructed, one residential house in India], then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its tr....
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....rs for constructing a house in the given case before us was 14-04-2011. Vide sub-sec.2 of section 54 a deposit under capital gains scheme, if the capital gain is not appropriated for such construction has to be done before the due date for furnishing the return of income u/s (1) of sec.139 of the IT Act, 1961. Hon'ble Punjab & Haryana High Court in the case of CIT Vs Ms Jagriti Aggarwal 339 ITR 610 has held that sub-sec.(4) of sec.139 can only be construed to as a proviso to sub-sec.(1) and thus, the due date furnishing the return mentioned in sec.139(1) is subject to the extended period provided under section 139(4) of the IT Act, 1961. The impugned assessment year before us is assessment year : 2009-10, and the extended time period u/s 139(4) is before expiry of one year from the end of the relevant assessment year or before completion of assessment whichever is earlier. One year from the end of the impugned assessment year would expire only on 31-03-2011. The assessment for the impugned assessment year having been completed only on 29-12-2011 the date to be reckoned for the purpose of application of sub-sec.2 of sec.54 in the case before us is 31-03-2011. Thus, it is clear that ....
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....a Reddy (1979) 4 SCC 721, however, gave it a wider meaning and it was held that the payment made for execution of release deed by the brother thereby joint ownership became separate ownership for price paid would be covered by the word "purchase " . It was observed that the word "purchase " used inSection 54 of the Act should be interpreted pragmatically in a practical manner and legalism shall not be allowed to play and create confusion or linguistic distortion. The argument that "purchase " primarily meant acquisition for money paid and not adjustment, was rejected observing that it need not be restricted to conveyance of land for a price consisting wholly or partly of money " s worth. The word "purchase " , it was observed was of a plural semantic shades and would include buying for a price or equivalent of price by payment of kind or adjustment of old debt or other monetary considerations. It was observed that if you sell a house and make profit, pay Caesar (State) but if you buy a house or build another and thereby satisfy the conditions of Section 54, you were exempt. The purpose was plain; the symmetry was simple; the language was plain. 9. Recently Supreme Court in Civil....
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....o the sale deed which was executed. 10. More direct are the two decisions of Madhya Pradesh High Court in Shashi Verma (Smt.) vs. CIT [1997] 224 ITR 106 and Calcutta High Court in CIT vs. Smt. Bharati C. Kothari (2000) 244 ITR 352. In Shashi Verma (supra), the assessee had invested the sale consideration for purchase of a flat from Delhi Development Authority and had paid part installments. Reversing the decision of the Tribunal and allowing the appeal of the assessee, the High Court observed that the Tribunal had adopted a pedantic approach without noticing the fact that the capital gain was Rs. 31,980/- whereas the installments paid were Rs. 71,256/-, i.e. much more than the amount of capital gain. Reference was made to Circular No. 471 dated 15th October, 1986 [1986] 162 ITR (Stat.) 41. It was observed that Section 54 of the Act says that assessee could have constructed the house and not that the construction should have necessarily been completed. Noticing that it was not easy to construct a house within the time limit of three years and under the Government schemes, construction takes years. When substantial investment was made in the construction and it should be deemed th....