TaxTMI 
TaxTMI 
2018 (1) TMI 1237
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....iled the required information and the AO verified the same. The AO found that the assessee has shown "Nil" income under the head "Capital Gains in the return of income after reducing the cost of acquisition and the claiming deduction u/s 54F of the Act as under: a) Sale consideration received vide sale deed dated 7.11.2013 Rs.1,01,40,000 b) Less: Indexed cost of acquisition vide deed dt. 21.8.1996 Rs. 4,66,070 Rs. 96,73,930 Less: reinvested in purchase of Rs. 96,73,930 Jubilee Hills property for Rs. 1.00 crore Vide sale agreement dt. 3.7.2013. NIL 3. The AO, in order to examine the allowability, issued a show-cause notice to the assessee to explain how deduction u/s 54F is allowable. The AO also observed that though the assessee claimed to have paid Rs. 1.00 crore for purchase of the property within one year before the transfer of the property, on verification of income statement, it is observed that the assessee has deposited the amount of Rs. 1.00 crore on 7.11.2013 into his Bank A/c and therefore, the purchase transaction has not materialized. The assessee was therefore, asked as to how the assessee is eligible for the ....
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....nd that he has re-deposited it into the Bank A/c after a period of one year. Therefore, the AO brought to tax the unexplained cash credit of Rs. 6.00 lakhs and Rs. 20.00 lakhs respectively. 6. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the order of the AO and the assessee is in second appeal before us. 7. The learned Counsel for the assessee submitted that the assessee had invested the entire capital gains for purchase of a residential property at Jubilee Hills by paying a sum of Rs. 1.00 crores to the vendor, but the vendor, with a malafide intention of cheating the assessee, has not come forward to register the property in assessee's name even though the assessee was willing to pay the balance of the sale consideration and the assessee had to resort filing of a suit for specific performance before the Civil Court to get the property registered in his name. He submitted that as far as assessee's claim of exemption u/s 54F of the Act during the relevant A.Y is concerned, the assessee has satisfied the conditions thereof and therefore, should be allowed exemption u/s 54F of the Act. He submitted that even if the property is not registered in h....
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....he extent of Rs. 37.00 lakhs is proved beyond reasonable doubt, whereas the payment of the balance by way of cash after withdrawal from Bank A/c is doubted by the CIT (A). We find that the AO has not doubted the payment of Rs. 1.00 crores to the vendor. It is also not in dispute that the total sale consideration for the property is for Rs. 4.40 crores and the assessee was required to make the payment of the balance amount. According to the assessee, the sale transaction has not gone through because the vendor intended to cheat him and it is also not in dispute that the assessee has issued a legal notice to the vendor and also filed a civil suit before the Civil Court at Hyderabad for specific performance of the sale agreement. 10. As far as the claim of exemption u/s 54F is concerned, it is on the ground that he has invested the entire capital gain for purchase of the residential house by paying the advance of Rs. 1.00 crore within one year before the sale of the original asset. We find that to claim exemption u/s 54F of the Act, the assessee has to invest the capital gains in purchase of a residential house within a period of one year before or within a period of two years afte....
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....xemption u/s 54F as he satisfied the relevant conditions and if the assessee demolished the building subsequently within a period of three years, the assessee losses the benefit u/s 54F and the capital gains so claimed is taxable in the year in which the new asset is transferred. 12. Having regard to the above decisions, we find that the common finding of all the Courts is that if the assessee has invested the long term capital gains in purchase or construction of a new residential house within the period specified in the section, then, the assessee is eligible to claim deduction u/s 54F of the Act. Admittedly, the assessee has paid an advance of Rs. 1.00 crore to the vendor, but the property could not be registered because of the vendor's attitude. There is no material on record to attribute the non-registration due to any fault of the assessee. The assessee has also filed a copy of the suit for specific performance in OS No.20094/2015 filed before the Additional Chief Judge, City Civil Court, Hyderabad wherein the assessee has stated that he had paid the advance to the vendor on 3.7.2013 and that the assessee has issued legal notices to the vendor on 5.4.2014 and also on 21.5.....