2017 (6) TMI 1352

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....012 to M/s. Rajkham Builders Pvt Ltd by agreement of sale for a consideration of Rs. 1,45,80,000/-. The company allotted fully paid up shares in their board meeting dated 30.01.2012 to the tune of Rs. 1,80,00,000/-. Ld. Assessing Officer considered this amount as sale consideration and from that he deducted cost of acquisition of Rs. 21,51,078/- and paid long term capital gains on transfer of capital assets on Rs. 1,58,48,922/-. The assessee claimed deduction u/s. 54 of the Income Tax Act, 1961 (in short ''the Act'') towards purchase of property at Madhurapakkam Village, Tambaram Taluk for a consideration of Rs. 68,01,600/- which was denied by the ld. Assessing Officer. 3. Aggrieved, assessee filed an appeal before ld. Commissioner of Inco....

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....0 lakhs has been paid to Mr. T.K. Mohan Raj but not Mr. T. Sivakumar. It is further stated that an amount of Rs. 11,00,000/- paid on different dates from 25.01.2012 to 19.06.2012 vide Cheque Nos.123576, 123577, 123580 123581 could not be verified from the copy of the bank account as assessee filed bank statements for the period from 08.02.2013 to 31.03.2013 as the said payments were stated to have been paid prior to this period. Coming to the major amount of Rs. 1 crore, stated to have been paid, to Shri T. Sivakumar on 27.03.2013 vide Cheque Nos.848322 to 848325 is also found incorrect. Copy of the bank account of Indian Overseas Bank filed before him which was in the same of Mr. Arumugam M. On perusal of his bank account, it was observed ....

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....s. 139(4) of the Act has held by the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Jagriti Aggarwal 339 ITR 610. If the assessee completes the construction of a new residential house within three years from the date of sale of capital asset, assessee is entitled for deduction u/s. 54 of the Act. Now the contention of the ld. Departmental Representative is that assessee has not appropriated towards construction of new residential house as it was not completed. In our opinion as held by Hon'ble Karnataka High Court in the case of CIT vs Smt. V.S. Shantha Kumari 126 DTR 436 completion of construction within three years was not mandatory and it was necessary that construction should be commenced, it should be proved by the assess....