TaxTMI 
TaxTMI 
2018 (4) TMI 2043
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....led by the assessee read as under: 1. The Learned CIT(A) erred in confirming the order of the Assessing officer denying the exemption u/s. 54 of the Act on the ground that the sum received from sale of immovable property was not utilized for the purchase of new property, without appreciating that the requirement of the law is that the assessee should purchase a residential house within the specified period and source of funds is quite irrelevant. 2. The learned CIT(A] erred in denying the deduction u/s. 54 of Income Tax Act, 1961 on the ground that during the year some amount is introduced by the assessee in his proprietary business as Capital contribution out of the sale proceed without appreciating that the Assessee has ....
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.... Loan dated 20.04.2009, the loan sanctioned by the bank was Rs.1,73,55,000/- to the joint borrowers viz the assessee, his wife and mother. Before the AO, the assessee filed a letter dated 05.11.2012 stating that he sold a flat for Rs.80,00,000/- and bought another new flat for Rs.1,75,43,000/-. The assessee had introduced capital of Rs.54,49,615/- in his proprietorship concern M/s Arvind Trading Corporation. The AO asked the assessee to explain the source of introduction of the above capital in his business. In reply to it, the assessee vide letter dated 30.11.2012 stated that capital of Rs.38,00,000/- introduced by the assessee in his business was out of the above transaction of property. Also it was explained that the assessee had taken o....
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.... said sale proceeds from earlier capital asset was utilized as capital introduction in the business of the assessee. The new residential house was purchased out of the home loan taken from Citi Bank. The Ld. CIT(A) also remarked that the identity of the capital receipt should not be changed and a particular receipt credited to the head of capital gain/sale proceeds of the immovable property should remain there, till another residential house is purchased. But in the instant case, the identity of head of income has diminished once the sale proceeds is invested as capital introduction in the business of the assessee. The Ld. CIT(A) held that as far as the provisions of section 54 is concerned, sub-section 54(1) is subject to the provisions of....
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....Rs.1.40 crores. Then the assessee within the period specified u/s 54(1) purchased two adjoining residential flats in one building for a total consideration of Rs.104.78 lakhs and gave them on rent to two different tenants. The assessee claimed deduction of Rs.104.78 lakhs u/s 54(1). The AO denied the deduction u/s 54 on the ground that the sale proceeds from the original flat were not deployed fully in new flats. At para 9 the Tribunal held : "The revenue's main dispute is that the sale proceeds were utilized for purchase of a commercial property and residential house was purchased out of the funds obtained from different sources, as such, the identity of heads has been changed. We do not find much force in this argumen....