TaxTMI 
TaxTMI 
2018 (12) TMI 1329
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....t considering the judicial precedence in the following cases wherein it is held that amounts spent even before the date of transfer of Asset has to be considered for allowing exemption. * High Court Of Karnataka in the case of CIT v. J R Subramanya Bhat (165 1 TR 0571) * Sandeep Khoslav. DCIT (2015 TaxPub (DT) 1549 Bang-Trib) * ITO, Corporate Ward-2(r), Chennai vs Shri Gangesan Saseendran - 2017(10) TMI 819 - ITAT Chennai * ACIT vs Subhash Sevaram Bhavnani - 2013 TaxPub(DT) 0592 - Ahmedabad 4. The Ld CIT (Appeals) erred in not considering circular 667 dated 18.10.1993, wherein it is clarified that the cost of the new residential house shall also include the cost of land. 02. Brief facts are that the assessee purchased a land on 17.04.2010 and has claimed exemption u/s.54F of the Act, of an amount of Rs. 3,83,76,769/- out of the capital gains of Rs. 8,62,15,500/- on the premise that the assessee's case falls within the purview of Section 54F(1) as the assessee has carried out the construction which includes the purchase of land and therefore the assessee was entitled to the benefit of 54F for the above said amount. However during the assessment proceedings the AO had denie....
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....t for availing exemption. Presumably for this reason the Bench which decided Surendra Cotton Oil Mills Case (supra) observed that there exists unsatisfactory state of law and the Bench which referred the matter initially, seriously doubted the conclusion in Sun Export Case (supra) that the ambiguity in an exemption notification should be interpreted in favour of the assessee. 41.After thoroughly examining the various precedents some of which were cited before us and after giving our anxious consideration, we would be more than justified 67 to conclude and also compelled to hold that every taxing statue including, charging, computation and exemption clause (at the threshold stage) should be interpreted strictly. Further, in case of ambiguity in a charging provisions, the benefit must necessarily go in favour of subject/assessee, but the same is not true for an exemption notification wherein the benefit of ambiguity must be strictly interpreted in favour of the Revenue/State. 05. We have heard the rival contentions and perused the record. For the purposes of adjudicating the present case, we deem it appropriate to reproduce section 54F relevant for the impugned assessment yea....
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....od of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such....
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....the long term capital asset Or ii) The Capital asset should have been acquired within two years after the date on which the transfer took place Or iii) Within a period of three years after the date of sale of the capital asset, the assessee had constructed one residential house in India. Admittedly for the purposes of availing the benefit of exemption u/s.54F, the assessee is required to satisfy that his case falls in any of the above conditions. The capital asset was sold on 01.04.2012 and the land was purchased by the assessee for which the benefit of section 54F was sought, was purchased on 17.04.2010. Hence it is beyond the pale of argument that the i) condition( supra) is applicable as the capital asset ( land ) has been acquired before a period of one year from the sale of capital asset. 06. Similarly it is not the case of the assessee that the assessee is claiming the benefit or exemption u/s.54F in clause (ii)(supra) as, As assessee has not purchased land within a period of two years after the transfer took place. 07. The claim under the last clause of 54F would only fall if the assessee within a period of three years after the date of transfer had constructed one r....