TaxTMI 
TaxTMI 
2018 (11) TMI 1054
X X X X Extracts X X X X
X X X X Extracts X X X X
....of exemption claimed by the assessee u/s 54F of the Act, in the facts and circumstances of the case. 4. The brief facts of this issue is that the assessee filed its return of income for assessment year 2013-14 on 25.03.2014 declaring total income of Rs. 23,05,590/-. The assessee entered into an agreement with Wagholi Properties Pvt. Ltd. for purchase of flat of total carpet area of 227.60 sq. meters in the building known as Panchshil Towers together with two car parking space for Rs. 2,37,46,500/-. The ld. AO sought to verify the said fact and accordingly issued notice u/s 133(6) of the Act to Wagholi Properties Pvt. Ltd. on 06.11.2015. Reply was filed by the said party on 26.11.2015 directly before the ld. AO wherein the flat cost was confirmed at Rs. 2,37,47,500/- + other charges of Rs. 22,73,575/-. 5. The assessee sold shares of K.B. Industrial Alloys Pvt. Ltd. on 11.07.2012 for Rs. 1,46,92,300/-. These shares were purchased by the assessee in financial year 1988-89 and 2008-09. The assessee derived long term capital gain of Rs. 1,45,42,091/-. The assessee claimed exemption u/s 54F of the Act in the return of income in the said amount in view of his new investment in purch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erived on transfer of a capital assets is, within a period of one year or two years before the date on which the transfer took place purchased or has within a period of three years after the date constructed a residential house, the capital gain would be allowed as a deduction. Sub section 4 of section 54F of the Act impose another condition for claiming deduction u/s.54F(1) of the Act. provides as follows :- " Section 54F (4): The amount of the net consideration 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 the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139 in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to file the required details. The assessee did not file the required details. In such situation the AO proceeded to compute long term capital gain at a sum of Rs. 38,94,750/-, which we have set out in paragraph 6 of this order . 11. Aggrieved by the order of AO the assessee preferred appeal before CIT(A). 12. We have observed that CIT(A) considered purchase of land as to the extent of Rs. 3,50,000/- as eligible for deduction u/s 54F of the Act. We have already held that stamp duty and registration charges of Rs. 31,839/- should also be eligible for deduction u/s 54F of the Act. With regard to the remaining unutilised net consideration of Rs. 16,50,000/- the assessee filed details of the deposit of the said sum in specific bank account as is required u/s 54F(4) of the Act. The details of the various dates of deposits as furnished by the assessee before CIT(A) reveal the following decision :- 3. It can be seen that the assessee had deposited on or before 31.07.2004 which was the due date of filing the return of income u/s 139(1) of the Act. Rs. 2,60,000/- to this extent the CIT(A) held that the assessee was entitled to deduction u/s 54F of the Act. With regard to th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the deposit of unutilized net consideration received on transfer of the capital gain in a specified account as is required u/s.54F(4) of the Act and the question regarding completion of the construction will have to be examined only in the AY in which the time limit for constructing a new house expires. The following were the relevant observations of CIT(A): " As per the remand reports submitted by the Ld AO it was not conclusively proved that the residential house was completed within 3 years from the date of sale of land. But the fact remains that the assessee has constructed a residential house on the land purchased by her which has not been disputed by the Ld AO. The Courts have held that exemption U/S 54F cannot be denied on the ground that the construction was not completed within the stipulated period. As the assessee has purchased land and thereafter constructed residential house thereon although Completion Certificate has not been issued by the municipal authorities the assessee is eligible for exemption U/S 54F to the extent of investment of Rs. 3,50,000/- made for purchase of land for the purpose of construction of residential house thereon. For this assessmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... entire net consideration within the stipulated period. The Chennai Bench of ITAT in the case of Mrs. Seetha Subramanian vs ACIT 59 ITD 94 (Mad) also took a view that investment of the net consideration for construction of the house has alone to be seen for allowing deduction u/s 54F of the Act. 17. Having come to the conclusion that the assessee had utilised the net consideration in construction of a house within the period of three years from the date of transfer, the question would be whether the absence of deposit of unutilised net consideration in a specific bank account as is required u/s 54F(4) of the Act, should the Assessee be denied the benefit of deduction u/s 54F of the Act. On this issue the ld. Counsel for the assessee brought to our notice the decision of the Hon'ble Karnataka High Court in the case of CIT, Bangalore vs K.Ramachandra Rao (2015) 56 Taxmann.com 163 (Karn). In the aforesaid decision the assessee had not deposited the unutilised net consideration in a specific bank account as is required u/s 54F of the Act. The assessee had however invested the net consideration in construction of a residential house within the period contemplated u/s 54F (1....