TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 572
X X X X Extracts X X X X
X X X X Extracts X X X X
....ong term capital gains, addition of Rs. 5,510/- as interest income and disallowance of Rs. 30,000/- u/s.80C of the Act. 2.1 During the course of assessment proceedings, AO verified the copy of purchase deed no.16937/2013 dated 22.11.2013 in respect of purchase of flats for Rs. 1 ,06,00,100/- - and a copy of work order dated 20.11.2013 given by the assessee to M/s Raichandani Constructions Private Limited., for furnishing the flats and making it habitable with the facilities and amenities mentioned therein for Rs. 25 lakhs, the AO noticed that the assessee has purchased residential flats on 22.11.2013. However, as per the provisions of sec. 54F, the net consideration which is not appropriated by the assessee towards purchase of the new asset within one year before the date of transfer of original asset or which is not utilized by him for purchase or construction of the new asset before the due date of furnishing the return of income u/s. 139(1) shall be deposited by the assessee into the capital gains account scheme before the due date for furnishing of the return of income u/s. 139(1) of the I.T. Act. For clarity, he reproduced the provisions of section below: - "As per the Prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....th built up area of 2035 sft. and flat No. 301 in third floor with built up area of 2035 sft. whereas as per the provisions of sec. 54F the exemption is available in respect of only one residential house. Even if it is considered for a moment that assessee is eligible for exemption u/s. 54F the exemption u/s. 54F shall be restricted to the cost of one flat as against the cost of two flats claimed by the assessee. Further, on perusal of the purchase deed, AO noticed that the construction of the residential flats has not been commenced and the same is evident from the fact that the builder M/s. Raichandani Constructions Pvt. Ltd have acquired the lands, on which residential cum commercial complex proposed to be constructed, from its previous owners only on 07.11.2013 and the sale deed for sale of residential flats to the assessee was executed on 22.11.2013. Further, it is also noticed from the copy of the work order dated 20.11.2013 that the assessee has given work order to M/ s. Raichandani Constructions (P) Ltd., for furnishing the residential flats and making it habitable with certain facilities and amenities as mentioned in the work order for Rs. 25,00,000/ - and the time limit f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of return of income u/s.139 meaning thereby that the appellant is eligible for claim of deduction u/s.54F as the appellant has filed the return of income on 6-12-14 u/s.139(4) of the I.T. Act before the due date of filing of return u/s.139(4) i.e. on 31-3-2015. It was the stand of the AR of the appellant that the appellant's case comes under purview of section 139(4) and not u/s.139(1) of the I.T. Act. In this case, the appellant has purchased a new asset vide sale deed document no.16937/2013 dated 22-11-2013 after paying sale consideration of Rs. 1 crore on 20-11-2013 and Rs. 25,00,000/ - on 18-11-2013 and further an amount of Rs. 2,86,000/- on 3-12- 2013. In support of claim of exemption, the AR of the appellant heavily relied on the ratio of decision of the Hon'ble High Court of punjab and Haryana in the case of CIT vs. Jagtar Singh Chawla reported in (2013) 215 Taxmann 154, Hon'ble Guwahati High Court in the case of Rajesh Kumar Jalan reported in 286 ITR 274. The AR of the appellant vehemently argued that the provisions of the sec.54 provide for allowance of exemption when the appellant has purchased new property before extended due date of filing of return of incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... two units, the deduction u/s.54F(I) is still available to the assessee as the wording in section.54F(I) was 'a residential house', which was interpreted by various High Courts as more than one residential house. The Hon'ble Jurisdictional High Court in the case of syed Ali Adil reported in 352 ITR 418 for A.Y.2007-08 held that exemption u/s.54 cannot be denied where residential house property purchased by assessee consists of independent units, even if such independent units were situated side by side on different floors are were purchased under different sale deeds. Further, Hon'ble High Court of Madras in the case of smt V.R.Karpagam for A.Y.2007-08 reported in 373 ITR 127 held that for the purpose of exemption u/s.54F a residential house could include multiple flats/residential units. On this issue, the AR of the assessee drawn to my attention the amendment carried out in Finance (No.2) Act, 2014 w.e.f.1-4-2015, wherein, exemption was made available for investment in one house. I find that the amendment specifying investment in one unit in order to claim exemption u/s.54F is applicable from A.Y.2015-16 only. Respectfully following the ratio of the jurisdictional....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sentitle the assessee from claiming the benefit ujs.54F of the Act. Once the assessee demonstrates that the consideration received on transfer has been invested either purchasing a residential house or in constructing a residential house even though the transactions are not complete in al/ respects and as required under the law that would not disentitle the assessee from availing benefit u/s.54F of the Act." The jurisdictional Tribunal in the case of Pradeep Kumar Chowdhary Vs. DCIT in ITA No.1520/Hyd/2012 for A.Y.2009-10 held in Para 14 that even if only advance is given, the benefit still will be available for exemption u/s.54F. Respectfully following the ratio of decisions of the jurisdictional Tribunal in the cases cited supra, 1 am of the considered view that the assessee is eligible for claim of exemption u/s.54F on the amount of investments made upto the date of the filing of return of income. In the result, I am of the considered view that the assessee is eligible for claim of exemption u/s.54F of the I.T. Act and Assessing Officer is not correct in denying the claim of exemption. Therefore, the Assessing Officer is directed to grant the exemption u/s.54F of the I.T Act.....