AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 894
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....ase are as follows: The assessee is a Doctor by profession. For the assessment year 2015-2016, the return of income was filed on 07.09.2015 declaring total income of Rs.2,10,030. The assessee had disclosed income from profession, interest income and capital gains. The assessment was selected for scrutiny and notice u/s 143(2) of the I.T.Act was issued. During the course of scrutiny assessment, it was noticed that the assessee had claimed a sum of Rs.1,26,00,000 as exempt u/s 54 of the I.T.Act. The details of the same were called for and it was noticed that the assessee has not invested in a residential house but paid a sum of Rs.1,26,00,000 to one Sri.B.Suresh for purchase agricultural land of 2 acres at Kolar Taluk. It was evidenced by unregistered agreement for purchase of an agricultural land. No registered document was produced by the assessee. Therefore, the A.O. held that the assessee has not made any investment in residential property for claiming exemption u/s 54 of the I.T.Act. The relevant finding of the A.O. in this regard reads as follows:- "Transfer of residential house property for a sum of Rs.1,26,00,000/- dated 18.04.2015: On perusal of the evidences and docume....
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....sregard the agreement for purchase of agricultural land in respect of her claim of exemption under Section 54 of the Act. So as such the appellant has accepted that she was not eligible to claim exemption under Section 54 of the Act in relation to investment of Rs. 1,26,00,000/- as made for purchase of agricultural land. Considering above the ground of appeal 4 of the appellant is dismissed. 5.6 As regards additional evidence filed by the appellant, this is observed that the same is not relevant to any of the grounds of appeal of the appellant. Through this additional evidence the appellant has sought adjudication of issue as to 'whether she was eligible for exemption under Section 54 of the Act on the basis of purchase of house property on 22.03.2018 i.e. after the assessment had been passed by the AO and also after a period of three years from the date of sale of the original asset (the original asset being sold on 23.04.2014 08.09.2014, 30.10.2014, 14.11.2014 and 24.11.2014)'. So vide the additional evidence the appellant has sought adjudication on a ground of appeal which neither. formed part of the grounds of appeal taken up in Form no. 35 nor the same had been filed....
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.... within the stipulated time the exemption u/s 54 of the I.T.Act cannot be granted to the assessee. The assessee has sold the property on various dates during the relevant assessment year, namely, A.Y.2015-2016. The details of the same has been tabulated at page 2 of the assessment order. As per the provisions of section 54 of the I.T.Act, the assessee ought to have purchased the residential house within 2 years or constructed a residential house within 3 years from the date of sale of the original asset (the original asset was sold on 26.03.2015 for a total consideration of Rs.1,26,00,000 and the assessee ought to have either purchased the new asset on or before 25.03.2017 or construct within 3 years i.e. on or before 25.03.2018). Admittedly, the assessee has neither purchased nor constructed the residential house within the due date specified. It is also an admitted position that the proceeds from the sale of original asset was deposited by the assessee in a capital gains account scheme with the State Bank of India on 26.03.2015 itself. The copy of statement of capital gains account scheme is placed at page 31 of the paper book filed by the assessee. 9. It is the case of the asse....
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....s have been utilised within the period prescribed under section 54 of the I.T.Act and the main requirement to make a claim under section 54 of the I.T.Act, is to utilise the capital gains for the purpose of acquisition of a residential house, which in the instant case was fulfilled, albeit with a delay in registration of the property. The learned AR has further argued that the registration of the property, similar to the completion of the construction of a house property would signify the completion of the procedure for investment, the latter part was not to be treated as absolute, considering the benevolent nature of section 54 of the I.T.Act. The assessee has submitted that the utilisation of the capital gains within the time specified would suffice to make the assessee eligible to the claim of deduction under section 54 of the I.T.Act, and the assessee should not be treated as not being eligible for the deduction claimed. The claim of the assessee is that she is entitled to the deduction under section 54 of the I.T.Act, since she has complied with the requirement of section 54 of the I.T.Act, in so far as investing the capital gains from the sale of the house property into a cap....
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....id on behalf of the Purchaser the entire consideration of Rs. 1,18,20,000/- (Rupees one Crore eighteen lakhs twenty thousand only) to the to the VENDORS in respect of sale consideration of the SCHEDULE PROPERTY and Sri. B SURESH also paid the stamp duty and Reg. fees of Rs. 7,80,000/- on behalf of PURCHASER, which amount was originally paid by the PURCHASER to Sri. B. SURESH, the Consenting Witness; and" 12. The section 54 of the I.T.Act mandates that the assessee must invest in a new asset to be eligible for the claim of deduction under section 54 of the I.T.Act, i.e. within the periods specified in the Act, which in the instant case is not complied with. The assessee's argument that the acquisition of the new asset by way of registration was not necessarily the determining factor, in so far as the contention that the capital gains was utilised within the specified time and the registration was not germane to the claim, as long as the asset was acquired. 13. The Hon'ble Apex Court in the case of Fibreboards (P) Ltd. v. CIT (2015) 376 ITR 596 (SC) had held that the utilization of the capital gains within the period would suffice for making the claim of deduction u/s 54G of th....
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.... word 'purchase'. The expression 'purchased' used in sub-clause (a) of section 54G of the Act requires to be understood as the domain and control given to the assessee. In the present case, it is not in dispute that the assessee has paid advance amount for acquisition of land, plant, building and machinery, etc., within the time stipulated in the Section, but it is not the case of the assessee that after such payment of advance amount, it has taken possession of land and building, plant and machinery. In our view, if the argument of the learned Senior Counsel for the assessee is accepted, it would defeat the very purpose and object of the Section itself. By merely paying some amount by way of advance towards the cost of acquisition of land for shifting its industrial unit from urban area to non-urban area, an assessee cannot claim exemption from payment of tax on capital gains. This cannot be the intention of the Legislature and an interpretation, which would defeat the very purpose, and the object of the Act requires to be avoided." (at para 31 of the impugned judgment) 38. We are of the view that the aforesaid construction of Section 54G would render nugatory a vital part of th....
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.... of realization of sale proceeds of shares. The developer acknowledging the said amount has given particulars of the stage of construction. According to him, only minor fittings like window shutters and some electrical work were required to be made, In fact, the report of the inquiry conducted by the Department also discloses the flooring work, electrical work, fitting of door and window shutters were still pending. The assessee has produced before the authorities the registered sole deed dated 7.11.2009 showing the transfer of the property in his favour. The said document discloses marble tiles flooring has been done, electricity, water and sanitary connections have been given, wood used is teak in respect of doors and windows. The assessee has been put in possession of the property and he is in occupation. Therefore, the assessee has invested the sale consideration in acquiring a residential premises and has taken possession of the residential building and is living in the said premises. The object of enacting section 54 of the I.T.Act, i.e., to encourage investment in a residential building is completely fulfilled." 15. It is also pretend to place reliance on the judgment of th....