TaxTMI 
TaxTMI 
2018 (10) TMI 56
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....ain amount within the time prescribed u/s 139 (1) of the Act. 3. Briefly stated the facts of the case are that during the year the assessee has sold his 50% share in house property in New Delhi. The house property was sold for a consideration of Rs. 2.01 crores and half share of assessee works out of Rs. 1.05 crores. The assessee disclosed his share of long term capital gain at Rs. 5915345/- out of which exemption of Rs. 5334447/- has been claimed u/s 54 of the Act. The assessee purchased booking of flat in a project developed by Vardhman Infrahome Private Limited. The details of payment are as under :- Date Cheque No. Amount 29.10.2012 RTGS 25,13,122.00 23.02.2013 343101 4,23,760.96 18.03.2013 931125 ....
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....de substantial investment towards the purchase of new property and because builder could not complete the construction of the residential house, therefore, the claim of exemption cannot be denied as per CBDT Circular No.471 dated 15.10.1986 and 672 dated 16.12.1993. Per contra the DR strongly supported the findings of the CIT(A). The undisputed fact is that the assessee has made substantial investment towards the purchase of new residential house. The Assessing Officer himself has given exemption to the extent of Rs. 38.49 lacs as against the claim of Rs. 53.34 lacs. A similar issue arose before the coordinate bench in the case of Seema Sabharwal in ITA No.272/Chd/2017 relevant findings read as under :- "8. We have heard the rival ....
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....capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; 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 shall be reduced by the amount of the capital gain. (2) The amount of the capital gain which is not appropriated by the ' assessee towards the purchase of the new asset made within one year before the date on which the transfer of t....
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.... provisions of section 54 of the Act reveals that it deals with the capital gains earned on sale of property used for residence and as per the provisions of sub section of section 54 of the Act, if an assessee, after sale of his residential property, has within a period of one year before or two years after the date of such transfer or within a period of three years, constructs a residential house, the capital gains will not be charged to tax upto the extent of the amount spent on the purchase or construction of residential house. Sub Section (1) of section 54 of the Act is a substantive provision enacted with the purpose of promoting purchase / construction of residential houses. However, sub section of section 54 is an enabling p....
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.... the assessee should put the amount of capital gains in an account in any such bank or institution specifically notified in this respect and that the return of the assessee should be accompanied by submitting a proof of such deposit, hence, sub section (2) is an enabling provision which governs the Act of the assessee, who intends to claim the benefit of the exemption 'provisions of section 54. S-he real purpose of the enabling provision is the compliance of the substantial provision of sub section (1) to section 54 of the Act. Sub section (2), in fact, regulates the procedure for the substantive rights of the exemption provisions u/s 54 of the Act. This enabling section, in our view, cannot abridge or modify the substantive rights given vi....
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.... within three years from the date of transfer can he be denied exemption under Section 54F on the ground that he did not deposit the said amount in capital gains account scheme before the due date prescribed under Section 139(1) of the IT Act?" 10. The said question has been answered by the Hon'ble High Court in the following words:- "As is clear from Sub Section (4) in the event of the assessee not investing the capital gains either in purchasing the residential house or in constructing a residential house within the period stipulated in Section 54 F(i), if the assessee wants the benefit of Section 54 F, then he should deposit the said capital gains in an account which is duly notified by the Central Government. In ot....