TaxTMI 
TaxTMI 
2023 (5) TMI 580
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.... in law and on facts by rejecting the deduction u/s 54F and making an enhancement of Rs. 1,73,65,056/- on the ground that possession of flat was not given to the assessee, because: 1.1. The necessary ingredient u/s 54F is reinvestment by way of purchase construction or purchase and construction but not possession. 1.2. The rights accrued to the Assessee when the Purchase Agreement & Construction Agreement were executed and registered. 1.3. The delay in handing over the possession was not in the control of the Assessee. 1.4. No tax liability accrues to the assessee in the year under consideration, as the sale proceeds were duly deposited in the Capital Gains Scheme, irrespective of any other fact. ....
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.... the Assessment Order (Para 2, Page 1 of the Assessment Order) 5. During scrutiny proceedings, the said claim of deduction under section 54F, had been examined in detail and duly allowed. However, only the indexed cost of acquisition of Rs. 10,25,801/- & the expense of Rs. 2,83,473/- was disallowed. 6. For the sake of ready reference, the findings of the AO (Para 5, Page 2 of the Assessment Order) is reproduced as under: "5. The record of the A.Y. 2015-16 was received in this office from ITO, ward 45(3), New Delhi which received the records from ITO, Ward-44(1), New Delhi. Record was perused thoroughly but no aforesaid documents were found. So, in the absence of any explanation/ supporting evidence, in view of the provisions ....
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....d circulars are applicable only to construction by DDA or any similar cooperative society and such construction would be deemed to be construction made by the assessee. It is no manner relaxes the three year timeline provided under section 54F for cases where there was no deposit in the CG Account Scheme. In the appellants case the capital gains has not been appropriated towards the acquisition of a residential house by wav of purchase and neither has the amount been deposited in a designated account to be utilized for construction. The construction time line has not been met and therefore deduction under section 54F is not eligible. As a result the income from capital gains is enhanced to an extent of Rs. 1,73,65,056/- due to the said dedu....
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....digarh) The construction was in progress and was not complete and in view thereof the benefit of exemption claimed under section 54F was rejected by the authorities below. However, following the ratio laid down by the Madhya Pradesh High Court in the case of Smt. Shashi Varma v. CIT [1997] 224 ITR 106. It was found that there was no merit in the plea of the authorities in denying the exemption under section 54F on the ground that the construction of the house had not been completed. The requirement of sections 54 and 54F is for the assessee to have either purchased a residential house being a new asset within the stipulated period or construct a residential house within a period of three years from the date of transfer. The section....
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...., then it should be deemed that sufficient steps have been taken and this satisfies the requirements of section 54. Therefore, the view taken by the Tribunal was not correct. * Hasmukh N. Gala vs. ITO [2017] 83 taxmann.com 49 It was held that completion of the construction or possession of the residential house is not material if assessee has invested the substantial part of the money for acquisition or construction of residential house. In such a case deduction u/s 54 or 54F cannot be denied. * Pr. CIT vs. C. Gopalaswamy [2016] 384 ITR 307 (Karn) It was held that where the assessee has entered into an agreement with a builder and invested the capital gain for purchase of a residential unit, he is entitle....