TaxTMI 
TaxTMI 
2025 (3) TMI 2169
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....of appeal or earlier. 2. The brief facts of the case are that the assessee lady filed her return of income on 28.09.2015 declaring total income at Rs. 2,64,230/-. The case of the assessee was selected for limited scrutiny under CASS. In the year under consideration the assessee claimed deduction u/s. 54F of the Act on sale of agricultural land amounting to Rs. 1,09,42,400/-. After detailed deliberation on the issue between the assessee and AO, ultimately claim of the deduction u/s. 54F of the Act was denied. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT(A), who in turn dismissed the appeal of the assessee and confirmed the order of the AO. The assessee being further aggrieved, preferred the present appeal before us. 3. We have gone through the order of the AO, order of the Ld. CIT(A) and submissions of the assessee alongwith ground taken before us. It is observed that the assessee under consideration sold an agricultural land for a sale consideration of Rs. 1,26,40,966/- on 20.08.2014. The said land was purchased on 30.09.2014 for Rs. 7,69,203/- (Before indexation). The sales consideration of Rs. 1,26,40,966/- and indexed cost of acquisitio....
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....f the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property": Provided further that where the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees shall not be taken into account for the purposes of this sub-section. Explanation. -For the purposes of this section, - "Net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 ....
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.... 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1), Exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as 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 the unutilised amount in accordance with the scheme aforesaid: 5. In view of the provisions of section 54F of the Act as enumerated (supra), it is observed vide clause a(iii) of the proviso and sub-section 2 that the assessee has to "constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset". As far as commencement of construction is concerned there is no stipulation in the section. To substantiate his side of version, the AO relied upon the judicial pronouncements of various Ho....
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....nd in the absence of any material, the Tribunal had come to an erroneous conclusion, and, hence, the Court could interfere under reference. The documents relied on by the assessee before the Tribunal were mere letters addressed by the architect. The said architect had given a quotation and bill and his acknowledgement of the receipt of a sum of Rs. 75,000 from each of those two Assessees, which were not sufficient to prove that there was construction of residential houses. The said documents and other evidences were produced first time before the Tribunal. But the revenue had relied on the inspection report and also verified with the Corporation and further they had taken photographs of the place and all those documents revealed that there was only an extension of old building. In the instant case, there was no proof for the construction of the residential houses and, hence, the assessee was not entitled to relief under section 54F. [Para 9] [2009] 313 ITR 411 (Ker.) Mrs. Meera Jacob vs. Income-tax Officer Section 54F does not provide for exemption on investment in renovation or modification of an existing house. On the other hand, construction of a house only qua....
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....ecified time frame stand exempt and not the entire consideration received. [Para 13] Section 54F is a beneficial provision and is applicable to an assessee when the old capital asset is replaced by a new capital asset in form of a residential house. Once an assessee falls within the ambit of a beneficial provision, then the said provision should be liberally interpreted. [Para 14] [2015] 56 taxmann.com 163 (Kar.) CIT, Bangalore vs. K Ramachandra Rao Both the authorities relied upon by the assessee are relevant and substantiates the claim of the assessee on the given set of facts. In the matter under consideration before us, the only question before us is whether the construction of new residential house can be started even before the sale of capital asset under consideration or not, and the answer is yes. Because section as enumerated (supra) deals with the completion of the construction of the house and not the starting of the construction of the residential house. 7. The assessee entered into an agreement dated: 14.12.2012 for demolition of existing house at pages 14-16 of PB and other relevant details relating to construction of the house were placed befo....