TaxTMI 
TaxTMI 
2026 (7) TMI 1245
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....national Taxation-1, and dismissed the appeal preferred by the appellant. 4. The brief facts of the case are that the appellant / assessee is an individual and non-resident Indian. He had not filed return of income for the Assessment Year 2017-18. As per the immovable property transaction information disseminated by the I&CI wing for the Financial Year 2016-17 relevant Assessment Year 2017-19, the Assessing Officer noted that the assessee along with 45 others had entered into DAGPA for development and sale of immovable property of all the land, admeasuring acres 4.505 in Survey No.14 of Guttala Begumpet Village, Serlingampally Mandal, Rangareddy District (21806 square yards with an approximate built up area of 2,75,00,000 sft.), registered vide DAGPA document No.6418/2016 dated 31.05.2016, for a total sale consideration of Rs. 43,61,20,000/- as against SRO value of Rs.62,86,20,000/-. As per the DAGPA, the owners and developer shares are 47.25% and 52.75%. As the assessee is one amongst the 46 owners, the share of the assessee is 1/46th of the share of the owners. The assessee's share in chargeable sale consideration as per section 50C of the Act for computation of long term capi....
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.... clear violation in accordance with Section 54F of the Act. It further held that the assessee itself admitted that the construction of the villa was not completed till date and the occupancy certificate was also not received. 9. In the appeal preferred before the ITAT by the assessee against the DRP's ruling, the ITAT held that it was abundantly clear that the delay caused on the part of the assessee was beyond 7 years in completing the construction as against the period of three years as is envisaged under Section 54F of the Act, and hence, dismissed the appeal and upheld the ruling of the Assessing Officer. 10. Being aggrieved of the said order, the present appeal has been filed. The appeal was admitted on the substantial question of law as to "whether exemption under Section 54F of the Act can be denied to the assessee if there is a delay in receiving the legal title over the residential villa beyond the prescribed time period stipulated under Section 54F due to factors beyond the assessee's control?" 11. Learned counsel for the appellant contended that: a) The Joint Development Agreement (for short, the 'JDA') signed between the assessee along with 45 others a....
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.... piece of provision and has to be liberally construed and the fact that the partners of the developers delayed in constructing the residential property of the assessee would not disentitle the appellant from claiming the benefit of Section 54F because the assessee has already shown on record that the capital gains realized from the sale of the long term assets was parted off by the assessee and subsequently invested to construct the residential property. Therefore, the exemption under Section 54F of the Act cannot be denied by the Department. 15. In the case of CIT vs. C. Gopalaswamy (2016) 384 ITR 307 it was held that Section 54F of the Act is a beneficial piece of legislation and cannot be denied to the assessee merely due to non-completion of construction or non-registration of the residential property, as it would override the legislative intent behind the very enactment. The relevant paragraphs of the said judgment for ready reference are reproduced hereunder, viz., "4. Being aggrieved by the said order, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) which came to be dismissed. The assessee carried the matter before the Tribunal in....
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....ntion of the Legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of law. The words used in the section are "purchased" or "constructed". For such purpose, the capital gain realised should have been invested in a residential house. The condition precedent for claiming the benefit under the provision is that capital gains realised from sale of capital asset should have been invested either in purchasing a residential house or in constructing a residential house. If after making the entire payment, merely because a registered sale deed had not been executed and registered in favour of the assessee before the period stipulated, he cannot be denied the benefit of section 54F of the Act. Similarly, if he has invested the money in construction of a residential house, merely because the construction was not complete in all respects and it was not in a fit condition to be occupied within the period stipulated, that would not disentitle the assessee from claiming the benefit under section 54F of the Act. The essence of the provision is whether the assessee who received capital gains has investe....