TaxTMI 
TaxTMI 
2026 (1) TMI 683
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....ssing Officer by restricting the deduction u/s 54 of the Act to Rs. 44,40,000/- as against the claim of Rs. 66,91,617/ -. 3. On the facts and in the circumstances of the case, the Learned CIT(A) erred by upholding the order passed by the learned Assessing officer by disallowing an amount of Rs. Rs.22,51,617/- u/s 54 of the Act without considering the submissions made by the Assessee and the fact that the assessee had invested the entire long term Capital Gains in the new residential house property much before the time limits specified u/s 54 of the Act. 4. On the facts and in the circumstances of the case, the learned CIT(A) ought to have considered the fact that section 54 is a beneficial section as per the intent of the legislation and ought not have restricted the claim for deduction u/s 54 of the Act to Rs. 44,40,000/- as against the claim of Rs. 66,91,617/- made by the assessee on mere technicalities. 5. On the facts and in the circumstances of the case, the Learned CIT(A) erred by upholding the order passed by the Learned Assessing Officer in levying interest U/s 234B and u/s 234D of the Act in consequence to the above made erroneous additions. ....
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....Scheme ("CGAS") in accordance with section 54(2) of the Act. Accordingly, the Ld. AO completed the assessment under section 143(3) r.w.s. 143 (3A) and 143(3B) of the Act on 28.01.2021 assessing the total income of the assessee at Rs. 1,32,46,244/-. 4. Aggrieved with the order of the Ld. AO, the assessee filed appeal before the Ld. CIT (A). The Ld. CIT (A) dismissed the appeal of the assessee and upheld the addition made by the Ld. AO. 5. Aggrieved with the order of the Ld. CIT (A), the assessee is in appeal before the Tribunal. At the outset, the Learned Authorised Representative ("Ld. AR") submitted that the solitary issue out of the grounds of appeal of the assessee is towards the rejection of deduction under section 54 of the Act amounting to Rs. 22,51,617/-. The Ld. AR further submitted that the assessee had entered into an Agreement of Sale dated 02.03.2018 with M/s Sri Aditya Vamsiram Homes LLP for purchase of a new residential house for a total consideration of Rs. 4,44,00,000/-. The Ld. AR also submitted that the assessee had made payments aggregating to Rs. 44,40,000/- towards the new residential house up to the due date of filing the return under section 139(1) of t....
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....up to the due date of filing the return. The Ld. DR further submitted that the Ld. CIT(A) had rightly upheld the disallowance by applying the plain language of section 54(2) of the Act and that no interference is warranted. Accordingly, the Ld. DR prayed for dismissal of the appeal filed by the assessee. 7. We have carefully considered the rival submissions and perused the material available on record, including the judicial precedents relied upon. In the present case, the assessee sold the original residential house on 14.12.2017, resulting in long-term capital gains of Rs. 66,91,617/-. The assessee thereafter purchased a new residential house for a total consideration of Rs. 4,44,00,000/- by a registered sale deed dated 24.10.2019, which is within two years from the date of transfer of the original residential house. Out of the total consideration of Rs. 4,44,00,000/-, the assessee had made payments aggregating to Rs. 44,40,000/- up to the due date of filing of the return of income under section 139(1) of the Act. The Ld. AO allowed deduction under section 54 of the Act only to the extent of Rs. 44,40,000/-, being the amount invested up to the due date of filing the return und....
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....e, the Division Bench decision of the Karnataka High Court made in ITA No.47 of 2014 in the case of K. Ramachandra Rao (supra) is relevant to be quoted, wherein while considering the scope of Section 54F(1) to 54F(4) of the Income Tax Act, it has been observed as follows: "If the intention is not to retain cash but to invest in construction or any purchase of the property and if such investment is made within the period stipulated therein, then Section 54F(4) is not at all attracted and therefore, the contention that the assessee has not deposited the amount in the Bank account as stipulated and therefore, he is not entitled to the benefit even though he has invested the money in construction is also not correct." 16. Learned counsel for the Revenue relied on the decision of the Supreme Court Dilip Kumar and Co. (supra) in support of her contention that exemption notification should be interpreted strictly and the burden of proof of its applicability would be on the assessee. I have already pointed out that the assessee, in this case, has claimed that it has utilised the disputed sum towards the cost of the additional construction within the period of three years ....