TaxTMI 
TaxTMI 
2022 (8) TMI 604
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.... was issued to the assessee. On 09.09.2015, a notice under Section 142(1) was issued to the assessee. The dispute between the assessee and the Revenue arises under Section 54F of the Act. The dates relevant for examining the claim of the assessee for computation of business income, are stated chronologically as follows: 1981-82 Assessee's father late E.K. Chandrasenan and two others purchased 2.5 acres of land in Chendelpet Taluk, Tamilnadu. (Hereinafter called the original asset). 11.07.2007 The assessee paid Rs.10,00,000/- to Heavenly Homes (P). Ltd for the purchase of a house in a housing scheme developed at Vaduthala. 03.03.2008 The assessee paid the developer a further sum of Rs.5,00,000/-. 20.01.2012 ICICI Bank dispersed home loan amounting to Rs.70,22,302/- in favour of K.S Premanand- husband of the assessee. March 2013 The assessee sold 1/3 share in the original asset and received Rs.3,30,00,000/- as sale consideration. The assessee claimed a sum of Rs.2,14,87,000/- as investment exemption under Section 54F of the Act. The Assessing Officer limited the claim for an exemption to Rs.1,21,00,000/- and disallowed the claim for exemption made....
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....ssessee took place in the month of March 2013 i.e. during the financial year 2012 13 relevant to A.Y. 2013-14. Payment for purchase of land and construction of the residential house started from 11.07.2007. Construction of the residential house is not completed even now. So in no way amount spent for purchase of a property and construction of a house in the name of the assessee and her husband, which started on 11.07.2007 can be connected with sale of land which took place in the month of March 2013, for claiming exemption u/s. 54F. The assessee vide letter dated 08.12.2015 confirms that due to financial issue, the builders has stopped construction, which is yet to be completed. Further, Section 54F gives a 3 year period limitation for construction of the new residential house. Here the property i.e. the original asset in question was transferred in March 2013. Three year period will expire in March 2016. Construction of the new residential building has not completed yet. Construction of residential house, according to the assessee started from 11.07.2007. From 11.07.2007 to 31.12.2015 (the date on which this order is passed), number of months are 102 i.e. eight and half years. ....
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.... Commissioner of Income-tax V. Bharti Mishra (2014) 8 TaxCorp (DT) 56475 (Delhi), C.Aryama Sundaram V. Commissioner of Income Tax (2018) 258 Taxman 0010 (Madras) and argues that the view held by the Tribunal is contrary to the interpretation placed by the Madras and Delhi High Courts on the meaning to be assigned to the words "within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed," arising in Section 54F of the Act. It is not a condition precedent to undertake the construction from the very sale consideration received from the sale of the original asset. It is argued that the value of the construction of a residential house includes the value of the plot and the construction cost. The important consideration is that the assessee has within three years after that date i.e. the sale of the original asset constructed a residential house. There is no dispute on the acquisition of the new asset, but for reasons beyond the assessee's control, the project was delayed. The sanction of loan by ICICI Bank is for construction and the amounts received as loan or sale considera....
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....s replaced by a new capital asset in form of a residential house. Once an assessee falls within the ambit of a beneficial provision, then the said provision should be liberally interpreted. The Supreme Court in CCE v. Favourite Industries, [2012] 7 SCC 153 has succinctly observed: "21. Furthermore, this Court in Associated Cement Companies Ltd. v. State of Bihar [(2004) 7 SCC 642], while explaining the nature of the exemption notification and also the manner in which it should be interpreted has held: (SCC p. 648, para 12) "12. Literally 'exemption' is freedom from liability, tax or duty. Fiscally it may assume varying shapes, specially, in a growing economy. In fact, an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification of inequitable burden of progressive approach of fiscal provisions intended to augment State revenue. But once exception or exemption becomes applicable no rule or principle requires it to be construed strictly. Truly speaking, liberal and strict construction of an exemption provision is ....
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....or less than the cost of the new residential house, including the land on which the residential house is constructed, the capital gain is not to be charged under Section 45 of the said Act." 5. Mr Christopher Abraham relies on the findings recorded by the Tribunal and argues that the crucial aspect in the matter viz. the three periods, viz. purchase one year before and two years after the sale of the original asset and construction within three years from the sale of the original asset a residential house. The case on hand attracts Section 54F (4) of the Act and the findings are correctly recorded by the Tribunal. He relies on the judgment reported in Shantaben P. Gandhi v. Commissioner of Income Tax, Gujarat-III [1981] 129 ITR 218 Guj. 6. We have taken note of the rival contentions and examined the ratio laid down in the cases relied on by Mr A. Kumar. To appreciate the argument made in law, first, we would prefer to excerpt the consideration of the issue by the CIT (Appeals) which reads as follows: "In the instant case, there is no doubt about the fact, that the appellant started construction of a residential house, albeit prior to receipt of sale consideration fro....