TaxTMI 
TaxTMI 
2016 (5) TMI 1492
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....facts of the case, while restricting the exemption claimed u/s 54 of the Income Tax Act, 1961, to the extent of Rs. 6,00,000/-. 2. That the Assessing Officer has failed to appreciate that the balance amount out of the sale consideration was further spent for the renovation / repairs of new property purchased, as such the income from capital gain was declared NIL after claiming deduction u/s 54 of the Act. 3. That the CIT(A) was wrong while uphold the additions made by the Assessing Officer, because of not passed the speaking order after taking into consideration the material available on the records. 4. That the restriction of the claim of deduction u/s 54 is further against the law and to the facts of the case as....
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....on of Mumbai Bench of ITAT in case of Milan Sarad Ruparel Vs. ACIT, 27 SOT 61 (Mum). Aggrieved by this assessee preferred appeal before the ld CIT(A), who dismissed the appeal of the assessee holding that exemption u/s 54 is allowable only to the extent capital gain is utilized for investment in the new residential house property. Ld CIT(A) also stated that as AO has relied upon the decision of Mumbai ITAT wherein it has been held that when assessee constructs or purchase of residential house out of borrowed he is not eligible for deduction u/s 54F. she further held that section 54F and section 54 are pari material and therefore the ratio of this judgment is applicable in this case also. Aggrieved by this assessee is in appeal before us. ....
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....isation for the purpose of section 54F and other relevant provisions. It is quite likely that the assessee may use the money for his business and draw the amount for investment from his past savings. Conversely, he may place sale proceeds in long-term investment other than what is permitted under section 54, but, all the same find money from the business or other sources for approved investment within the time. Since law itself permits investment in a new property even before the sale of property covered by sections 54 and 54F, the law does not contemplate the identity of the funds on sale for its investment. Since money has no colour, all that is required in compliance with the condition of investment within the specified time. 15....
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....s after the date of transfer. 16. This similar view was again expressed by the Tribunal in the case of Mrs. Prema P. Shah [2006] 282 ITR (AT) 211 (Mumbai) ; 100 ITD 60. It was held that there is no requirement of law that same amount of sale consideration should be utilised for acquisition of property for claiming exemption under section 54 of the Act. The Tribunal placed reliance upon the order of the Tribunal in the case of Bombay Housing Corporation [2002] 81 ITD 545 (Mumbai). But, this case pertains to the exemption claimed under section 54E of the Act and under section 54E there is no provision like sub- section (4) which puts a condition precedent that if the sale proceeds is not appropriated for purchase of the new residenti....
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....1,24,02,738. After the sale of the above property, the assessee has acquired the commercial property for a total consideration of Rs. 125.28 lakhs and gave it on rent and out of the other funds, the assessee has purchased two residential flats on which deduction under section 54(1) was claimed. In the light of these facts, the Tribunal has correctly made the observation that it is not necessary that the same sale proceeds should be invested in acquiring a residential house, if the assessee had other surplus funds, that can be invested." ([underline and emphasis supplied by us] 9. However now this issue is covered in favour of the appellant by the decision of Honourable Bombay high court in CIT v Dr Parishca INCOME TAX APPEAL NO. 1825 ....
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....act merely required the purchase of the new house to be within the specified period. The source of funds for the purchase was irrelevant. In para No 9 of the Order of Coordinate bench it is held in para no 9 which has been approved by Hon Bombay high court as under :- "9. Having heard the rival submissions and from careful perusal of the Orders of the lower authorities and provisions of section 54 of the Act, we find that assessee has initially utilized the sale proceeds on sale of its residential flat in commercial properties and later on he purchased two residential flats within a period specified in sub-section (2) of section 54 of the Act, and these facts are not disputed by the revenue. The revenue's main dispute is that the s....