TaxTMI 
TaxTMI 
2016 (12) TMI 447
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....invested Rs. 56,54,000/- from the sale consideration of the property for purchase of property in Flat 3B, 101, Kalpataru Aura, Lal Bahadur Shastri Marg, Ghatkopar, Mumbai and the balance was invested from the bank loan funded by the SBI. The property was purchased by the assessee long with his sonMr.Aneessh Sivakumar and her daughter in law Ms. Neha Bhujang in the joint names. The Assessing Officer issued a show cause notice to the assessee to restrict the exemption of capital gains u/s 54F at Rs. 51,36,785/-(i.e the investment made from sale consideration). In response to the show cause notice, she explained that the assessee has sold the property for a sum of Rs. 90 lakhs and acquired a new property on 30.1.2013 i.e within two years from the date of sale of the property, hence she is entitled for the deduction u/s 54F of the Act which was claimed in the return of income. Not being impressed with the explanation offered by the assessee, the Assessing Officer allowed the capital gains exemption to the extent of Rs. 51,36,785/- (proportionate to the sale consideration) and the balance amount of Rs. 30,39,915/- was brought to tax under the capital gains. 4. The assessee went on ap....
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....in a period of one year before or two years after the date on which transfer takes place or construct a residential house within a period of three years after that date. In such cases, the capital gains shall be computed as per clauses (a) and (b) of sub-section (1). In case, the assessee is not able to appropriate the sale proceeds of long- term capital gain, then before filing of a return under section 139(1) he is required to deposit the same under any Capital Gain Account Scheme with a bank or institution specified by the Central Government in the official gazette. The assessee has to file proof of such deposit along with the return for claiming exemption under section 54F. [Para 13] • The assessee has to purchase or construct a house property during the period specified under section 54F in order to get benefit thereunder. Section 54F nowhere envisages that the sale consideration obtained by the assessee from the original capital asset is mandatorily required to be utilized for the purchase or construction of a house property. No provision has been made by the statute that in order to avail benefit of section 54F, the assessee has to utilize the amount received by....
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....tion, more so when even literal construction also does not say that the house should be purchased in the name of the taxpayer only. Section 54F of the Act is the beneficial provision which should be interpreted liberally in favour of the exemption/deduction to the taxpayer and deduction should not be denied on hyper technical ground. The Honourable HC also relied on the Andhra Pradesh High Court ruling in Late Mir Gulam AIi Khan Vs. CIT, (1987) 165 ITR 228 (AP) where in it was held that: Object of granting exemption under Section 54 of the Act is that the taxpayer who sells a residential house for purchasing anoth1r house must be given exemption so far as capital gains are concerned. The word "assessee" must be given wide and liberal interpretation so as to include his legal heirs also. There is no warrant for giving too strict an interpretation to the word "assessee" as that would frustrate the object of granting exemption. Based on the above judgments and another ruling (CIT Vs, Natrajan (2007) 287 ITR 271 (Mad) and CIT Vs. Gurnam Singh (2010) 327 ITR 278), the Honourable HC held that the conditions stipulated in section 54F of the Act was fulfilled by the taxpayer and taxpayer w....
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....ential house in India] (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: ^25[Provided that nothing contained in this sub-section shall apply where- (a) the assessee,- (i) owns>^25a more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) ^26constructs any residential house, other than the new asset, within a period of three years after the date of trans....