TaxTMI 
TaxTMI 
2025 (3) TMI 2165
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....013. 3. The learned CIT(A) erred in not considering the fact that the assessee has failed to invest in the residential building within the specified period of one year before from the date of sale as mandated for claiming deduction u/s 54F of the Act. 4. The Ld. CIT(A) erred in not considering the fact, against the relied upon the decision of the learned CIT(A) in the case of C. AryamaSundaramvs PCIT-3, the Supreme Court disposed the SLP on account of low tax effect and not on merits. 5. For these and other grounds that may be adduced at the time of heating, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored. 3. The cross objection preferred by the assessee are as under :- 1. The order of the learned Commissioner of Income Tax (Appeals)-NFAC is wrong, illegal and opposed to law. 2. The CIT(A) has dismissed the claim of the appellant, that the value of the land that had been gifted to twenty people who had illegally occupied a portion of the land sold by the appellant costing Rs. 98,12,720/- as cost of improvement/ cost incurred to complete the sale of land. 3. At the ....
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....aused not by any deliberate omission on the part of the assessee and the assessee filed an affidavit explaining the reasons for cause of the delay, we find there was excusable cause for condoning the delay and we do so, and proceed to hear the appeal of the revenue as well as the cross objection preferred by the assessee. 5. The sole ground of the revenue is against the action of the Ld.CIT(A) allowing deduction u/s.54 of the Income Tax Act, 1961 (hereinafter in short "the Act") in respect of cost of the land purchased on 01.02.2013 (i.e. more than 2 years & 1 month before the sale of long term capital asset on 31.03.2015). 6. Brief facts are that the assessee purchased a land on 01.02.2013 at a cost of Rs. 11,43,90,477/- and has claimed exemption u/s.54F of the Act, an amount of Rs. 13,43,90,479/- which included construction of a residential building costing Rs. 1,89,22,000/- out of the capital gains of Rs. 87,39,060/- on the premise that the assessee's case falls within the purview of Section 54F(1) as the assessee has carried out the construction of a residential building, which includes the purchase of land, and therefore, the assessee was entitled to the benefit of s....
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....consideration of Rs. 12,50,00,000/- and the total long term capital gain that arose to the appellant assessee was Rs. 10,47,95,925/-. In the meanwhile, on 14.5.2007, the appellant assessee purchased the property with superstructure thereon at No.138, Jor Bagh, New Delhi for a total consideration of Rs. 15,96,46,446/-. After demolishing the existing superstructure, the appellant assessee constructed a residential house at a cost of Rs. 18,73,85,491/-. Thus, the appellant assessee claimed entire long term capital gain as exempt from tax under Section 54 of the said Act. 5. The Assessing Officer held that only that part of the construction expenditure incurred after the sale of the original asset would be eligible for exemption under Section 54 of the said Act and based on records held that cost of construction incurred after the sale of the original asset was Rs. 1,14,81,067/-. Exemption of Rs. 1,14,81,067/- was allowed as relief under Section 54 of the said Act. 10. Following question of law are noted to have been admitted by the Hon'ble Madras High Court on the aforesaid facts, as under :- i. When capital gain arises from sale of building and/or land appurt....
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....against the cost of new residential house. The condition precedent for such adjustment is that the new residential house should have been purchased within one year before or two years after the transfer of the residential house, which resulted in the capital gain or alternatively, a new residential house has been constructed in India, within three years from the date of the transfer, which resulted in the capital gain. The said section does not exclude the cost of land from the cost of residential house. 22. It is axiomatic that Section 54(1) of the said Act does not contemplate that the same money received from the sale of a residential house should be used in the acquisition of new residential house. Had it been the intention of the Legislature that the very same money that had been received as consideration for transfer of a residential house should be used for acquisition of the new asset, Section 54(1) would not have allowed adjustment and/or exemption in respect of property purchased one year prior to the transfer, which gave rise to the capital gain or may be in the alternative have expressly made the exemption in case of prior purchase, subject to purchase from any....
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....and on which residential house is constructed, the capital gain need not be charged u/s.45 of the Act and therefore, we confirm the action of the Ld.CIT(A) and dismiss the grounds of appeal raised by the Revenue in this regard. 13. Before parting, we would like to address Ground No.4 of the Revenue that, dismissal of SLP preferred by the Revenue against the order of the Hon'ble Madras High Court in the case of C. Aryamna Sundaram (supra) for low tax- effect, doesn't mean that the view of the Hon'ble Madras High Court has been upheld by the Hon'ble Supreme Court, and therefore Ld CIT(A), erred in following it. We don't find any force in the said ground of Revenue for the reason stated infra. There is no quarrel that the Hon'ble Supreme Court has dismissed the SLP preferred by the Revenue against the order of the Hon'ble Madras High Court in the case of C. Aryamna Sundaram (supra) only for low tax effect and therefore, we accept that the principle of doctrine of merger didn't happen. However, the jurisdictional Hon'ble Madras High Court decision in the facts of the present case is squarely applicable to the facts of present assessee's case, ....
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....ferred an appeal before the Ld.CIT(A) who dismissed the same on the very same reasoning. 14.3 Aggrieved, the assessee is before us. 14.4 We have heard both the parties and perused the records. On this issue, it is noted that the assessee had sold the land at Perambakkam on 31.03.2015 for a sale consideration of Rs. 9,26,58,520/- and for computing the capital gains had claimed expenditure (cost of improvement) to the tune of Rs. 97,07,735/- by bringing to the notice of the AO that there were '20' illegal/unauthorized families whom all were in possession [adverse possession without any title] on the main part of the said land. Therefore, it was not possible for the assessee to sell the property without clearing them from the land. After protracted negotiations, they conveyed their willingness to clear from the main part of the land provided, they were allotted free of cost land at the corner of the same land, which was accepted by the assessee ;and by virtue of such agreement, twenty (20) Gift Deeds were executed in favour of '20' families which was valued at Rs. 98,12,720/- and in order to prove the claim, assessee is noted to have produced the copy of all Gift....