2024 (11) TMI 169

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....-22/1041851447(1) produced as ANNEXURE-G issued by Respondent No. I." 2. Heard the learned counsels for the parties and perused the material on record. 3. A perusal of the material on record will indicate that it is an undisputed fact that the petitioner sold the original asset, which was an industrial land for a total sale consideration of Rs. 3,05,00,000/- on 29.08.2016, and from out of the sale proceeds, the petitioner invested a sum of Rs. 1,86,55,700/- towards purchase of a residential site on 01.06.2017. On 29.09.2017, the petitioner filed income tax returns for the assessment year 2017-18 claiming exemption from long term capital gains on the ground that the balance/remaining amount of Rs. 1,18,44,300/- was utilized by him for the purpose of putting up construction and the construction of the house was completed on 26.08.2019 [within the prescribed period of three years from the date of sale of the original asset]. In pursuance of the same, respondent No.2 passed an assessment order on 12.12.2019 accepting the returns filed by the petitioner. Subsequently, respondent No.2 issued a notice under Section 148 of the Income tax Act, 1961 [prior to amendment] [for short, 'th....

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....ee is entitled to the benefit conferred under Section 54F when the sale consideration is utilized for construction of a residential house on a site which is owned by him within one year from the date of transfer? 2) When the assessee invests the entire sale consideration in construction of a residential house within three years from the date of transfer can he be denied exemption under Section 54F on the ground that he did not deposit the said amount in capital gains account scheme before the due date prescribed under Section 139(1) of the IT Act? 4.Re.PointNo.1 Section 54(F) deals with capital gains on transfer of certain capital assets not to be charged in case of investment on house. It reads as under. 54F. (1) [Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section 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 a....

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....sets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred.] [(4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of 10 which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub- section (1) of section 139 ....

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....e under Section 139 of the Act shall be deposited by him before furnishing such return in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under Section 139(1) of the Act in an account in any such bank or institution as specified and utilized in accordance with any scheme which the Central Government may, by notification in the official gazette framed in this behalf. Sub Section (4) is attracted only to a case where the sale consideration is not utilized either for purchase or for construction of a residential house. It has no application to a case where the assessee invests the sale consideration derived from the transfer either in purchasing the property or constructing the residential house within the period stipulated in Section 54F(1). The proviso to Section 54F puts an embargo on the application of Section 54F to cases which are mentioned in the said proviso. That is to be eligible for the benefit under Section 54F(1) the assessee should not be owning more than one residential house other than the new asset acquired or he should not purchase any residential house other than the new asset within a period of one y....