TaxTMI 
TaxTMI 
2018 (8) TMI 1124
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....llant prefers an appeal against the order passed by Ld. Commissioner of Income Tax (A)-33, Mumbai on following amongst other grounds each of which are without prejudice to any other :- 1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the disallowance of deduction u/s 54 of Rs. 83,04,453/- on purchase of a residential house; 2.0 On facts and circumstances of the case and in law, Ld. CIT(A) before confirming the disallowance of deduction u/s.54, ought to have considered the vital facts and settled law stated as under:- a) The appellant purchased a residential house on 19/4/2011 i.e within one year of the sale of a residential house on 04/02/2012 undisputedly within the time limits prescribed uls.54(l); b) The entire payments for purchase of a residential house had been paid prior to the due date of filing of IT return u/s 139(1); c) Sec 54(1) mandates the purchase of a residential house and does not postulate any condition to utilise the capital gain for purchase of new residential house; c) The incentive provision of Sec. 54 is required to be construed liberally; 3.0 Without prejudice....
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....term capital gain for the purchase of new assets and not eligible for claim of deduction under section 54 of the act. Aggrieved, assessee preferred the appeal before CIT(A). 4. The CIT(A) relying on the decision of co-ordinate Bench of ITAT Mumbai in the case of Milan Sharad Ruparel vs. ACIT (2009) 27 SOT 61 (Mum), Co-ordinate Bench of Indore in the case of Sushil Kumar Bafna vs. ITO (2017) 81 taxmann.com 50 (Indore - Trib.), co-ordinate bench of Hyderabad in the case of Smt. V. Kumuda vs. DCIT (2012) 18 taxmann.com 256 (Hyd.), confirm the action of the AO by observing in Para 5.10 as under:- "5.10 It is observed that the above mentioned judgements not only covers the issue under consideration but have discussed the case laws relied upon by the appellant, which has been distinguished too by the Hon'ble Tribunals. Since the facts of the instant case as identical to the facts mentioned in the judgements mentioned above, respectfully following the ratio of the judgements it is held that the appellant is not eligible for claim of deduction under section 54 of the IT Act since he has not utilized the sale consideration for the purpose of change of the new property. He has al....
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....accrued to the assessee. The assessee has purchased residential house with its own funds in saving bank account amounting to Rs. 24 lacs and balance amount was taken as loan amounting to Rs. 67.20 lakhs from Union Bank of India and paid a total purchase value of his share for this new flat at Rs. 91.20 lakhs for his share. In such circumstance, whether the assessee is entitled to claim exemption on long term capital gain arising out of sale of flat of Goregaon West amounting to Rs. 83,04,453/- under section 54 of the Act which was invested in purchase of residential flat at Malad West amounting to Rs. 91.20 lakhs. Revenue's main contention is that this amount of long term capital gain was accrued later and investment was made prior out of own sources and this capital gain was never invested. According to AO, and CIT(A) and now the learned Departmental Representative before us, the amount long term capital gain has not been utilized in purchase of residential house. We have gone through the provision of section 54(1) of the Act and the same reads as under:- "Profit on sale of property used for residence. 54. (1) Subject to the provisions of sub-section (2), where, ....
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....tion of the new house property. Where the amount of capital gain is greater than the cost of the house property so purchased or constructed, the balance amount of the capital gains is charged to tax. If, however, the amount of capital gain is equal to or less than the cost of the house property purchased or constructed, the capital gain is completely exempted from income-tax. If such house property purchased or constructed is transferred within a period of three years of its purchase or construction the capital gain on the property so transferred is calculated by reducing the cost of its acquisition by the amount of the capital gain exempted from income -tax. We find that this issue has been dealt by Hon'ble Kerala High Court in the case of ITO vs. K.C. Gopalan (1999) 107 Taxman 591 (Ker.), wherein Hon'ble High Court has interpreted the section of 54 of the act by observing as under:- "The assessee has to construct or purchase a house property for his own residence in order to get the benefit of section 54. The wording of the section itself would make it clear that the law does not insist that the sale consideration obtained by the assessee itself should be utilised for th....
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....is that the assessee should acquire a residential house within the period of one year before or two years after the date on which transfer took place. Nowhere, it has been mentioned that the same funds must be utilized for the purchase of the another residential house. The requirement of the law is that, the assessee should purchase a residential house within the specified period and source of funds is quite irrelevant." 11. Hon'ble Bombay High Court has affirmed the decision of this Tribunal in the case of CIT vs. Dr. PS Paricha in Income Tax Appeal No. 1825 of 2009 vide order dated 07-10-2009 by observing in Para 2 as under: - "2. Having seen the finding of fact recorded by the Tribunal in Paragraph No.9 that the assessee has initially utilized the sale proceeds of sale of his residential flat for purchase of commercial properties and later on he purchased two residential flats within a period specified in sub section (2) of section 54 of the Act. In view of the matter, the view taken by the Tribunal cannot be faulted. The appeals without any substance. Hence, the same stands dismissed in limine with no order as to costs." 12. Similarly, the Hon'ble Punjab & Haryan....