2020 (6) TMI 218

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.... hire basis and also receiving rental income from ancestral properties. On 3/5/2012 assessee sold 1 residential property for a consideration of Rs. 1.40 crores and derived the Long Term Capital Gain (LTCG) to the tune of Rs. 99,77,362/-. Under sale deed dated 13/7/2012 assessee purchased a residential plot for a consideration of Rs. 1,00,81, 000/- construction of a residential house. Assessee filed the return of income for the assessment year 2013-14 on 31/7/2013 declaring an income of Rs. 2,25,100/-after claiming the Long Term Capital Gain (LTCG) as exemption under section 54 of the Income Tax Act, 1961 (for short "the Act"). Assessee could not construct the residential house till the expiry of the period of 3 years from the date of transf....

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....ld not complied the requirement of completion of construction within the period of 3 years from the date of transfer, the capital gains would be taxable as income only in the assessment year 2016-17, i.e. the year in which the period of 3 years from the date of transfer of old asset expires and the exemption claimed under section 54 of the Act in that year cannot be denied. She placed reliance on the decisions of the Tribunal in the case of Sri Prasad Nimmagadda v. DCIT [2013] 32 taxman.com 5 (Hyderabad-trib.) and Vegesina Kamala v. ITO [2016] 66 taxmann.com 280 (Visakhapatnam-Trib). 5. Per contra, submission of the Ld. DR is that if we accept the contention of the assessee, it would NU to the benefit of the assessee since the interest cos....

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....lays down that if the amount of capital gain is not utilised towards construction of residential house within a period of 3 years from the date of transfer of original asset, then, it will be charged to capital gain under section fortify of the Act in the year in which the period of 3 years from the date of transfer of the original asset expires. 7. In that case also the assessee invested the long term capital gains on purchase of land towards construction of the house, which could not be constructed within the stipulated period of 3 years as the possession of the land could not be delivered by the developer and in such circumstances the assessee claimed exemption under section 54 of the Act could not be denied levy of proviso to section 5....