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Issues involved: The judgment involves the interpretation of exemption claimed by the assessee under section 54F of the Income-tax Act.
Summary: 1. The appeals involved a common issue regarding the allowance of relief on disallowance of investment made in the purchase of land u/s. 54F of the Act. The assessee claimed deduction for a specific amount under section 54F based on the purchase of a plot but had not started construction within the specified period. 2. The Assessing Officer disallowed the exemption u/s. 54F as the assessee had not met the conditions of investing in a new residential house within the stipulated time frame. The CIT(A) directed the Assessing Officer to allow the exemption based on the sale consideration and the claimed amount for the plot purchased for construction. 3. The dispute centered on whether the assessee should be granted exemption u/s. 54F despite not commencing construction within the required period. The AR argued that the development charges paid were towards construction, citing relevant case laws and circulars. 4. The Tribunal analyzed the provisions of section 54F and the circular issued by the CBDT regarding the cost of land as part of construction cost. It was emphasized that completion of construction within the specified period is crucial for claiming exemption u/s. 54F. 5. The Tribunal distinguished the present case from previous judgments where substantial construction had been completed within the stipulated time frame. The failure to start construction within the specified period led to the denial of exemption u/s. 54F in this case. 6. Referring to a decision by the Madras High Court, it was reiterated that initiation of construction within the specified period is essential for claiming exemption u/s. 54F. The payment of development charges alone does not fulfill the requirement for exemption. 7. Ultimately, the Tribunal set aside the CIT(A)'s order and upheld the Assessing Officer's decision to disallow the exemption u/s. 54F, leading to the allowance of the appeals filed by the Revenue. Separate Judgment: No separate judgment was delivered by the judges in this case.
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