TaxTMI 
TaxTMI 
2023 (3) TMI 1551
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..... The case was selected for scrutiny under CASS and statutory notices were issued to the assessee. The assessee filed reply, after verification of the details furnished it was noted that during the impugned assessment year under consideration, the assessee sold a plot of land on 08/09/2014 admeasuring 371.70 square meters situated at HSR Layout, Bangalore for a consideration of Rs. 2 cores. In the rerun of income, the long term capital gain was worked out to Rs. 1,86,63,291/- and clamed deduction u/s 54F of the Act. Being invested the entire sale consideration towards purchase of two residential BDA sites bearing No.196 and 197 admeasuring 360 square meters each and constructed a residential building at site No.197. During the assessment proceedings, the assessee was asked to substantiate the claim of deduction made u/s 54F of the Act. In response, the ld.AR of the assessee submitted as under:- "The property was acquired by late Mohan K Shetty, the husband of the assessee and the property was transferred from the deceased to the assessee in June 2009. The particulars of the property transferred are enclosed herewith. The property was duly declared in the assets and liabili....
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....S Builders requesting the assessee to release the payment in connection with construction work of the residential house. As per the provisions of the Act, in an event that the assessee is not in a position to invest in the new Capital Asset on or before the time limit u/s 139(l), she has to channelize the investment through a mandatory account specified under CGAS-88. The assessee has failed to undertake the same and unutilized amount has not been invested in CGAS-88 account before filing the return of income. 9. From the above, it is clear that the assessee has not fulfilled the two conditions to claim deduction u/s 54F of the Income Tax Act that the assessee has not constructed a residential house within a period of three years after the date of sale of capital asset and not deposited unutilized amount in the capital gain account before filing the return of income. Therefore, a letter dated 05-12-2017 was sent to the assessee proposing to disallow the deduction claimed u/s 54F and requiring the assessee to furnish her objection if any in this regard on or before 13-12-2017. The letter was served on the assessee on 07-12-2017. The assessee did not respond to the said lett....
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....The assessee filed detail written synopsis which is as under :- "This appeal is instituted against the order of the Commissioner Appeals, NFAC Delhi the Assessment Order passed by Income Tax Officer, Ward 2 Karwar. Against the order the assessee, with the grievance of disallowing the Capital Gain exemption by the assessee, hence the appeal has been filed before the Honorable Bench with Grounds of appeal. Ground No. No 1: Disallowance of Capital gain exemption u/s 54(f) for Rs. 1,86,63,291/- 1. The learned Assessing Officer did not allow the exemption claimed by the assessee for having invested the amount in the construction of new house property. 2. The assessee sold a plot at HSR Layout, Bangalore bearing No.1156 on 81h September 2014 for Rs. 2,00,00,000/- and consequently a Capital Gain of Rs. 1.86,63,291/- is declared in the Income Tax Return. 3. In order to claim exemption from capital gain the assessee decided to buy a site and construct a house under the provisions of Section 54F of the Income Tax Act, 1961. 4. The assessee purchased a site developed by the Bangalore Development Authority (BDA) from the site allotee Shri. ....
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....ssee is awaiting the final verdict by the Court. 10. With the above facts and circumstances of the case the assessee spent all the proceeds (more than net consideration) to buy the site and commenced the construction but could not be able to continue and complete the work. After the disposal of high court case in the first part, the assessee slowly mobilized the sources and restarted the construction. 11. The honest efforts of the assessee to construct a new residential house and avail the exemption U/s 54F should not be deprived of the benefit for the reason of delay in completion of construction, which is beyond the control of the assessee. 12. It is submitted that this case is covered by the following judgements: The Income Tax Officer, Bangalore Vs Mujeeb Urraliman [ITA No. 5 Bing/2019/ Assessee had purchased the residential site and used portion of net sale ration for construction of new house and not appropriated the balance sale consideration in investment in construction of residential house or deposit into account notified by the central Govt. to avail exemption u/s 54. Hence assessee was entitled for exemption to the extent of ....
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....datory as per the provisions of Act. Held: It was impossible for assessee to construct the residential house within the stipulated period of three years as assessee was restrained by a competent court. But, the intention of statute provided in section 54F had been fully satisfied by assessee. Therefore, assessee was entitled for exemption under section 54F. It is an accepted principle of jurisprudence that law never dictates a person to perform a duty that is impossible to perform. It was impossible for the assessee to construct the residential house within the stipulated period of three years. But she has purchased the land utilising the entire consideration received on the sale of the old property. It means that the assessee has invested the entire consideration received on sale of the old asset in acquiring/constructing a residential house property. In the special facts and circumstances of the present case, therefore, it is necessary to hold that the amount utilised by the assessee to purchase the land was in fact utilised for acquiring/constructing a residential house. Without purchasing land the house cannot be constructed. The first step should be the purchase of la....
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....th, New Delhi V/s ACIT, Circle 47(1), 5. ITA No. 1388/Del/2019 ITAT, Delhi "F" Bench Order Dated 14th May 2019 8. The ld. DR relied on the order of the lower authorities and submitted that before the CIT(A), he did not appear and not filed any documents, whereas the CIT(A) has given various opportunities to the assessee and he further submitted that the law is very clear that for getting exemption u/s 54F of that Act that the new residential building should be constructed within the period of 3 years from the date of the sale of the capital asset. The assessee also unable to establish, when the construction of the new residential building was completed, therefore he requested that the order of the authorities should be upheld. 9. After hearing rival contentions and perused the material available on record, on going through the order of the authorizes below, we noticed that the assessee sold capital assets and claimed exemption u/s 54F of the Act. On perusal of the documents submitted by the assessee, we note that the assessee has furnished Construction plan approval letter, construction bills issued by SKS builders & initial construction photo at page 61 to 65. From ....
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....5.11.2016 as narrated in para 2 of this order. Consequently the assessee obtained the building plan from BBMP on 26.5.2017. 9. While framing the assessment, exemption claimed by the assessee was denied since the assessee has not complied with the requirement of provisions of section 54 of the Act. However, the CIT(Appeals) allowed the claim of assessee u/s. 54 of the Act. Admittedly, the assessee has actually invested an amount of Rs. 1,70,16,279 in purchasing the residential site for constructing a new residential house. To that extent, proportionate deduction to be granted to the assessee. However, the CIT(Appeals) granted deduction u/s. 54F of Rs. 2,48,83,672, though assessee has not deposited that portion in the net sale consideration into the account scheme notified by the Central Govt. For this purpose, it is appropriate to go through the provisions of section 54(2) of the Act which are as follows:- "54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and bei....
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....h return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), 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." 10. The contention of the ld. AR is that in view of the judgment of the Hon'ble High Court of Karnataka in the case of CIT v. K. Ramachandra (supra), the assessee is entitled for deduction u/s. 54 to the full extent as granted by the CIT(Appeals) as the intention of the assessee was not to retain cash, but to invest in construction of new residential house property. The del....