2020 (10) TMI 1047

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....age Wakad, Tal: Mulshi, Pune during the year under consideration and received his share of sale consideration amounting to Rs. 67,50,000/-. After claiming deduction on account of the indexed cost of acquisition and some expenses incurred in relation to the sale of property, a long term capital gain as worked out at Rs. 61,00,344/- was declared by the assessee in his return of income filed for the year under consideration on 31.07.2012 and the same was claimed to be exempt u/s 54F of the Income Tax Act, 1961 on the ground that the investment to that extent was made by the assessee in the construction of house within a period of 3 years from the date of sale of the immovable property. During the course of assessment proceedings, it was notice....

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....unt before the due date of filing of his return u/s 139(1) of the Act. 4. The ld. CIT(A) did not find merit in the submissions of the assessee and proceeded to confirm the disallowance made by the Assessing Officer on account of assessee's claim for exemption u/s 54F of the Act for the following reasons given in paragraph no.3.5 of his impugned order :- "3.5 The appellant has submitted a Karnataka High Court judgment in CIT Vs K.R. Rao (2015) 56 taxmann.com 163 (Kar) for the proposition that section 54F(4) is not attracted if the intention is not to retain cash, but to invest in construction or purchase of property. However, the facts of the case before Karnataka High Court were that the assessee already had a land on which construction ....

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....om the date of transfer? 2) When the assessee invests the entire sale consideration in construction of a residential house within three years from the date of transfer, can he be denied exemption under Section 54F on the ground that he did not deposit the said amount in capital gains account scheme before the due date prescribed under Section 139(1) of the IT Act?" 6. It is observed that the facts involved in the case of K. Ramachandra Rao (supra) as highlighted by the ld. CIT(A) in his impugned order to distinguish the said case with that of the assessee were relevant to the issue involved in first question as raised before the Hon'ble Karnataka High Court whereas the issue involved in the present case was similar to the one involved in....

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....4F merely because he had not deposited the amount in specified bank account as stipulated. At the time of hearing before us, even the ld. DR has not been able to raise any material contention to doubt or dispute this legal position clearly propounded by the Hon'ble Karnataka High Court in the case of CIT vs. K. Ramachandra Rao (supra). He however has contended that the claim of the assessee of having invested the amount of net consideration in the construction of the new house within the stipulated period of 3 years from the date of the transfer of the original assets has not been verified either by the Assessing Officer or by the ld. CIT(A). He has contended that an opportunity may therefore be given to the Assessing Officer to verify this....