TaxTMI 
TaxTMI 
2019 (12) TMI 695
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....54. 2.1. That the assessee has rightly claimed the deduction under section 54 as per the provision of the Act. 2.2. That on the facts and circumstances of the case and in law, the CIT (A) has failed to understand the intention of the provisions of deduction available under section 54 i.e. for the investment/utilization of capital gain proceeds in another eligible property. 2.3. The CIT (A) has erred in law and facts in making the addition where the assessee has already invested Rs.l,14,51,375 in residential plot before filing of return and therefore utilized the entire capital gain and satisfying the condition of section 54 of the Act. 3. That the CIT (A) has erred in facts and in law in appreciating that the assesse could not get the possession of the plot, due to the reason beyond the control of the appellant, hence could not start the construction on the residential plot. Thus the appellant was prevented by sufficient cause for not starting the construction. However, the entire capital gain proceeds have already been utilized in purchase of the plot hence satisfying the conditions of section 54. 4. Without. prejudice, the CIT(A) and a....
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....be started within the stipulated time and added the same amount in the income of the assessee on account of long term capital gain. Against the assessment order, assessee appealed before the Ld. CIT(A) who vide his impugned order dated 04.10.2016 has dismissed the appeal of the assessee. Aggrieved the impugned order, assessee is in appeal before the Tribunal. 4. Ld. Counsel for the assessee stated that Ld. CIT(A) erred in confirming the addition made by the Assessing Officer aggregating to Rs. 81,66,515/- in the assessment order dated 02.03.2014 passed u/s. 143(3) of the Act and further submitted that Ld. CIT (A) has also failed to appreciate the provisions of section 54 of the Act and has made the addition ultra vires of section 54 of the Act. It was further submitted that the assessee has rightly claimed the deduction u/s. 54 of the Act. He further submitted that Ld. CIT(A) has failed to understand the intention of the provisions of deduction available under section 54 of the Act i.e. for the investment/utilization of capital gain proceeds in another eligible property. It was further submitted that Ld. CIT(A) has erred in making the addition where the assessee has already i....
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.... Rs. 81,66,515/-. The assessee claimed the deduction under section 54 of the Act by investing the entire sale proceeds (aggregate investment of Rs. 1,14,51,375 and details thereof as shown at page no. 39, 42 & 41 of the Paper Book) before the due date of filing Income Tax Return u/s. 139 of the Act for the purchase of another residential property at Green Bay Gold Village, Yamuna Expressway, Distt. Gautam Budh Nagar, UP. Construction on the said land could not be completed within the stipulated period of three years for the reasons beyond the control of the assessee i.e. Farmers agitation against Yamuna Authority related to the area in which plot was located, as seen from page 21-31 of the Paper Book and change of developer as Silverglades Pvt. Ltd. sold the project to other developer - Orris Infrastructure. In such circumstances, we are of the view that benefit of deduction cannot be denied to the assessee. Our aforesaid view is fortified by the ITAT, 'A' Bench decision dated 18.11.2019 passed in the case of Abodh Borar vs. ITO in ITA No. 5114/Del/2016 (AY 2013-14) wherein by respectfully following the ITAT, Delhi Bench decision in the case of Varun Seth vs. ACIT in ITA No. 1388/D....
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.... sale deed even up till the expiry of three years from the date of sale of property by him, because of reasons beyond his control which cannot be disputed. This vital fact assumes great significance as assessee had taken all the steps to make the investment for the purchase of house, and also assessee had deposited Rs. 25,10,000/- in the capital gain account with PNB so as to construct the house. This unequivocally demonstrate that assessee really intended to construct the new residential house thereon. It was based on this bonafide intention assessee had claimed exemption under section 54 of the Act. Without the purchase of land, house could not have been constructed. The first step was to purchase the land, which was done. Thereafter the developer was to handover the plot, so that assessee could have constructed the house within time allowed of 2 years. However, no step could be put forward thereafter because possession of land was not given by the Developer, for reasons beyond the control of the assessee. If an assessee sells his house property and utilises the money for acquiring a plot for the construction of the house and if facts and circumstances point out that ass....