TaxTMI 
TaxTMI 
2022 (10) TMI 829
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the assessee filed his return of income on 30.07.2013 declaring total income at Rs. 8,42,402/-. The case was selected for scrutiny assessment under CASS. Statutory notice u/s 143(2) of the Income-tax Act, 1961 (in short "the Act"), was issued on 2.9.2014. In response to the statutory notice the learned Authorized Representative of the assessee attended the proceedings and filed requisite details which were placed on record by the Assessing Officer. The Assessing Officer during the assessment proceedings noticed that the assessee had sold a property at Kolkata on 9.7.2012 for a sum of Rs. 1,44,00,000/- and computed long term capital gain at Rs. 1,19,02,758/- and against this the assessee claimed deduction u/s 54 of the Act stating that he had made investment in the Apartment at PPE 241 Block, DLF Park Place, DLF, Gurgaon. The Assessing Officer partly allowed the claim of deduction u/s 54 and computed the total capital gain at Rs. 1,11,54,834/- and income from other sources at Rs. 4,26,712/-. Thus assessed income at Rs. 1,19,03,130/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who after considering the submissions dismissed the appeal. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ities below. He submitted that the law is very clear on this point. The assessee ought to have purchased new asset one year before the transfer of the original asset and there is no infirmity into the orders of the authorities below. 6. We have heard rival contentions and perused the material available on record. The dispute in this case relates to entitlement of deduction u/s 54of the Act by the assessee. For the sake of clarity and effective adjudication, section 54 of the Act is reproduced herein below: 54. Profit on sale of property used for residence.- Subject to the provisions of sub-section (2), wherein, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a longterm capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereinafter in this case referred to as the original asset), and the assessee has 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, one residentia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h deposit being made in any case not later than the due date applicable in the case of assessee for furnishing the return of income under sub-section (7) of section 139]in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of subsection (7), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid." 7. The undisput....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ired to appropriate the capital gain towards the purchase of new asset made within year. It is the purchase which should be made within one year and in the absence of possession there would not be any transfer of capital asset, hence no purchase of new asset in terms of Section 54 of the Act. Undisputedly, the AO gave part relief by treating last instalment paid by the assessee as the capital gain appropriated within one year. In our view this act is not as per the intent of the provision. The possession of new asset was given by the builder within one year of sale of original asset. The date of handing over of possession would be date of purchase, since right over the property passed on the day of handing over of possession. Our view is also supported by the ratio of decision of the Hon'ble Bombay High Court in the case of CIT Vs. Smt. Beena K. Jain [ (1996) 217 ITR 363], approving the view taken by co-ordinate Bench of this Tribunal, by observing as under: "Under section 54F of the Income-tax Act, in the case of an assessee if any capital gain arises from the transfer of any long-term capital asset, not being a residential house, and the assessee has, within a period of one yea....