TaxTMI 
TaxTMI 
2016 (10) TMI 60
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....wed the appeal filed by the assessee in-part by concluding that assessee is entitled to exemption under Section 54 of the Income Tax Act, 1961 (for short 'Act') as assessee had fulfilled all the conditions prescribed under said section. 2. Facts in brief which has led to filing of this second appeal by the revenue can be crystlised as under: For the assessment year 2003-04 a return of income came to be filed by the assessee on 17.07.2003 declaring her total income as Rs. 34,59,390/-. Assessment came to be reopened under Section 147 and in response to the notice issued under Section 148, reply came to be filed by the assessee stating thereunder that original return filed is to be treated as return filed in response to the notice is....
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....1170(BNG)/2008. Tribunal after considering the rival contentions held that assessee was entitled to deduction since for the purposes of Section 54 of the Act the date of purchase was to be taken as the basis namely, entering into a agreement for purchasing the new property. It also came to be held that payment made by assessee to purchase new property fully covered the consideration of capital gains portion and as such, it came to be held that assessee was eligible for claiming exemption under Section 54 of the Act. It has been further held by the Tribunal taking of physical possession or for that matter registration of the sale deed would be immaterial. Hence, appeal filed by the assessee came to be allowed by order dated 30.01.2009 vide A....
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....counsel appearing for assessee would support the order passed by the Tribunal and contends that it is the utilization of amount, which was received by the assessee by sale of property, which had to be reinvested for the purposes of claiming benefit under Section 54 of the Act and said exercise having been undertaken by the assessee, Tribunal on appreciation of facts had found that assessee had reinvested the amount and thereby granted the benefit of claiming Long Term Capital Gain as provided under Section 54 of the Act. Hence, he prays for answering the substantial question of law in favour of the assessee. In support of his submission he would rely upon the judgment of this Court in the case of PRINCIPAL COMMISSIONER OF INCOME-TAX AND ANO....
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....ch the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, 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 the 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....
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....the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,-- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid." 11. A reading of the above Section would make it explicitly clear that proceeds of sale o....
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....t have within a period of two years after that date purchased another property; (vi) Property purchased must be residential; (vii) Exemption would be available only to the extent the sale proceeds are utilised; (viii) Where re-investment in a residential property is not made before due date for filing report, amount not so utilised till such date is required to be deposited in Capital Gain Account Scheme. Thus, if the above conditions are satisfied, assessee is entitled to claim benefit of the provision of Section 54. 13. Facts on hand would disclose that assessee had owned a flat at Mumbai and sold the same on 04.02.2003 for a total consideration of Rs. 1,70,00,000/-. Subsequent to such sale she entered into an agreement for purchasin....