TaxTMI 
TaxTMI 
2018 (3) TMI 374
X X X X Extracts X X X X
X X X X Extracts X X X X
....evance of the assessee revolves around two fold issues viz. the ld.CIT(A) has erred in confirming re-opening of the assessment, and (b) the ld.CIT(A) has erred in restricting deduction under section 54F of the Act to the extent of Rs. 30 lakhs and not granting against full investment. As far as re-opening of the assessment is concerned the ld.counsel for the assessee did not press this ground of appeal, hence, it is rejected. 3. With regard to second issue, brief facts of the case are that the assessee has filed his return of income on 21.3.2013 declaring total income at Rs. 9,85,610/-. It emerges out from the record that the assessee had sold land along with co-owners. He was having 1/6th share. The AO after granting deduction of expens....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hrough section 54F of the Income Tax Act and contended that section 54 mainly postulate two conditions viz. (a) capital gain must arose as a result of transfer of any assets other than residential house, and (b) the assessee should purchase new asset for residential purposes within two years or should construct residential house within three years. The assessee in the present case has fulfilled both the above conditions, inasmuch as long term capital gain has arisen as a result of sale of land and the assessee has purchased new asset being residential house for Rs. 70 lakhs. He also pointed out that so far as sub-clause (a) in section 54F is concerned, it provided for mode of calculation of exemption of long term capital gain. It contemplat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ised for construction of new building - Held, yes Section 54F of the Income-tax Act, 1961 - Capital gains - Exemption of, in case of investment in residential house (Conditions precedent) - Assessment year 2009-10 -Whether section 54F nowhere envisages that sale consideration obtained by assessee Prom original capital asset is mandatorily required to be utilized for purposes of meeting cost of new asset - Held, yes - Whether, therefore, where investment made by assessee, although not entirely sourced from capital gain, but, was within stipulated time and more than capital gain earned by him, assessee was entitled to exemption under section 54F -Held, yes [Paras 14 & 19] [In favour of assessee] 8. In the case of CIT Vs. Kapil Kum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....also not disputed about the investment made by the assessee. His grievance is that investment was made after taking loan from the employer and therefore, assessee cannot claim benefit under section 54F(1) qua the loan amount utilized for purchasing of the new house. Hon'ble Kerala High Court in the case of ITO v. KC Gopalan (supra) has held that in section 54, there is nocondition that assessee should utilize the sales consideration itself for the purpose of acquisition of new property. Similar are the other orders of the ITAT relied upon by the assessee. On perusal of section 54F(1) and sub section (4), it reveals that these sections do to put any restriction that only capital gain would be utilized for purchase of the new house. The l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ove discussion, we are of the view that learned revenue authorities have erred in holding that assessee is not entitled for exemption under section 54F(1) of the Income Tax Act, 1961 for a sum of Rs. 121,32,636/-. The investment of the assessee is more than the capital gain earned by him. Therefore, we allow the appeal of the assessee and delete the addition of Rs. 121,32,636/- in the total income of the assessee under the head "long term capital gain". 9. A perusal of the above would indicate that issue in dispute is squarely covered in favour of the assessee by the decision of Hon'ble Punjab & Haryana High Court cited supra. A perusal of computation of income made by the ld.AO on page no.8 of the assessment order would indicate that th....