TaxTMI 
TaxTMI 
2017 (5) TMI 1041
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....olony, Saidapet, Chennai - 600 015, by investing in new residential property situated at Unit No: 3, "HE VILLAGE",Kalavakkam, Chenglepet Taluk, Kancheepuram District. (ii) The Appellant sold the property on 22-6-2011 for a consideration of Rs. 1,15,00,000/- and the consideration amount was credited in his Punjab National Bank savings bank account. (iii) The Capital gains arising out of the sale was Rs. 74,20,062/- and the Appellant claimed exemption of the entire capital gains u/s 54 since he invested in the new residential property. The Appellant paid Rs. 50,00,000/- to the Builder M/S. Phoenix Hodu Developers Pvt Ltd vide two payments, first payment for Rs. 8,00,000/- on 08-12-2011 and the second one for Rs. 42,00,000/- on 21-12-2011 for which the Builder has issued receipts. The Appellant availed home loan from M/s. India Bulls Housing Finance Limited for an amount of Rs. 46,12,572/- and the Company paid an amount of Rs. 40,00,000/- to the Builder on 11-01- 2012 which is also acknowledged by the Builder and this loan amount also is construed as appropriation towards purchase of new house property qualifying for exemption under Sec.54. (iv) The Appellant has thus invested a to....
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....04) * Delhi High Court in CIT v. R.L. Sood (242 ITR 727) * ITAT, Hyderabad in Sri Pradeep Kumar Chowdry Vs DCIT ITA 1520/Hyd/2013) (ix) The Appellant paid Rs. 50 lakhs towards purchase of new property out of the sale proceeds received from the aIe of his property. The Appellant paid an amount of Rs. 14.99 lakhs towards the closure of home loan taken from Punjab National Bank in respect of the property sold by him. Also he paid an amount of Rs. 17.69 Iakhs to his Father in law towards his medical expenses who had to undergo a major heart surgery. The Appellant had funds shortage towards payment of new property and for this reason only, he had to avail home loan from India Bulls Housing Finance Limited. (x) The ld.A.R submitted that in order to claim exemption u/s 54, there need not be nexus between the funds to be invested in new property and the utilization of capital gains exemption amount. The only pre-requisite / condition is that in order to claim exemption u/s 54, the Assessee should invest in purchase of new residential property either within one year prior to the date of sale or purchase within two years after the date of sale or construct within three years from the dat....
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....b) Jagwinder Singh vs CIT(A),(2104) 50, TAXMANN.COM 145, the High Court of Punjab & Haryana wherein held that the benefit of section 54F cannot be granted in the absence of any evidence establishing construction of new residential house. c) Anu Aggarwal vs ITO (2012) 28 TAXMANN.COM 286 as per which the assessee is disentitled from claiming deduction under section 54F on her failure to construct new residential property within specified period on the plot purchased by her out of sale proceeds of her old property. d) Rasikala M. Parikh vs ACIT( 2012) 28 taxmann.com 195 wherein held that the allotment letter of a flat issued by builder could not become a basis for the claim of deduction under section 54F. e) Yoshovardhan Sinha vs ITO( 2016). 65 taxmann.com 31 as per this juidgement the assessee would not be entitled to exemption under section 54 where the cohstruction of new residential flat was not completed by end of three years from transfer of the old property. f) In the case of Smt. Sesha Jaggaiah vs ITO ( 2012) 20 taxmann.com 521, wherein held that assessee's claim for deduction under section 54 was denied by the AO on the grounds that the construction of the property was co....
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....eing 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 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 transfer within a period of three years of its purchase or construction, as the case may be, the cost sh....
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.... 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 v. Ms Jagriti Aggarwal [2011] 339 ITR 610/ 203 Taxman 203/15 taxmann.com 146 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 : 2012-13, 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 31-03-2014. The assessment for the impugned assessment year having been completed only on 24-12-2014 the date to be reckoned for the purpose of application of sub-sec. 2 of sec. 54 in the case before us is 31-03-2014. The assessee had time upto 31-03-2014 to deposit the capital gains in capital gain....
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....agreement to sell a house to a third party on 27th December, 2002 and had received Rs. 15 lacs by way of earnest money and subsequently received the balance sale consideration of Rs. 1.17 crores (total being Rs. 1.32 crores) when the sale deed was executed on 24th September, 2004. In the meanwhile, the assessee had purchased another house on 30th April, 2003. Benefit under Section 54 was denied by the High Court observing that the new house had been purchased prior to execution of the sale and not within one year prior to sale of original asset i.e. new house has been purchased on 30th April, 2003 whereas the earlier asset was sold only on 24th September, 2004. The Supreme Court allowing the appeal noticed that the agreement to sell was executed on 27th December, 2002 but the sale deed could not be executed because of inter-se litigation between the legal heirs, as one of them had challenged the will under which the assessee had inherited the property. The agreement to sell, it was held had given some rights to the vendor and reduced or extinguished rights of the assessee. This, it was observed was sufficient for the purpose of Section 2(47), which defines the term transfer in rela....
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....erty within 3 years from the sale of residential property i.e. 21.06.2014. As seen from the record, assessee entered into a construction agreement dated 21.12.2011 and made payment as above with reference to this construction agreement. As per the construction agreement, the assessee is required to make payment as follows:- Particulars Amount Balance payable Remarks Booking advance 8,00,000 1,16,02,567 Paid Rs. 8 lakhs vide cheque No.635912 dt.5.12.11 At the time of agreement on Dec.,2011 42,00,000 74,02,567 Paid Rs. 41,66,818/- vide cheque No. dt.21.12.2011 At the time of registration 40,00,000 34,02,567 11.01.2012 On January 2012 10,00,000 24,02,567 At the time of possession 24,02,567 TOTAL 124,02,567 Note: Payment schedule includes cost of UDS as per sale agreement dated 21st Dec.,2011. The construction was completed as on 05.11.2015 and the possession was handed over to the assessee on 05.11.2015 for which no disputes. 6.2 Since it was completed beyond the stipulated period u/s.54 of the Act, the lower authority denied the exemption u/s.54 of the Act. However, the assessee has taken t....