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2023 (1) TMI 621 - AT - Income TaxDeduction u/s 54F - AO denied the claim of deduction of payment made for purchase of property beyond the period of 3 years from the date of the sale of the original property - HELD THAT - As submitted that the delay in investment beyond the period of 3 years was beyond control of the assessee and mainly due to the delay on account of the builder not being able to complete the construction as per the time frame agreed initially. During the course of hearing assessee was asked to submit necessary documents in support of the contention that delay in investment by the assessee was due to the delay on the part of the builder in not completing the construction as per the time frame. However no such evidences were furnished before us. In such circumstances the ratio of the decisions relied upon by assessee cannot be applied over the facts of the instant case. As noted by the Ld.CIT(A) that the provisions claiming exemption has to be interpreted strictly. In view of the above facts and circumstances and the binding precedent followed by the Ld.CIT(A) on the issue in dispute we do not find any error in the order of the Ld.CIT(A) on the issue and accordingly we uphold the same. Ground 2 of the appeal of the assessee is accordingly dismissed.
Issues Involved:
1. Reopening of the assessment under Section 147 of the Income Tax Act. 2. Denial of exemption claimed under Section 54F of the Income Tax Act. Issue-wise Detailed Analysis: 1. Reopening of the assessment under Section 147 of the Income Tax Act: The assessee initially raised a ground regarding the reopening of the assessment under Section 147 of the Income Tax Act. However, this ground was not pressed by the assessee during the proceedings, and hence, it was dismissed as infructuous by the Tribunal. 2. Denial of exemption claimed under Section 54F of the Income Tax Act: The primary issue in this appeal was the denial of exemption under Section 54F, amounting to Rs. 87,89,121/-. The relevant facts are as follows: - The assessee had shown a long-term capital gain of Rs. 5,43,70,902/- for the Assessment Year 2008-09 and deposited Rs. 50,00,000/- under the 'Capital Gains Account Scheme, 1998', claiming exemption under Section 54F. This claim was initially disallowed but later allowed following an ITAT order. - The period of 3 years for utilizing the deposited amount expired on April 2, 2010. The assessee was required to pay capital gains tax on the unutilized balance of Rs. 2,90,29,120/-. - For the Assessment Year 2011-12, the assessee filed a return declaring a total income of Rs. 12,83,110/-. The assessment was completed under Section 143(3) on January 31, 2014, accepting the returned income. However, the assessment was reopened, and a notice under Section 148 was issued on March 27, 2017, as the unutilized amount of Rs. 2,90,29,120/- was not offered to tax. - The assessee contended that the delay in utilizing the amount was beyond her control due to the cancellation of an initial investment and subsequent delays by the builder in completing the construction of a new property. - The Assessing Officer (AO) rejected the assessee's contention and denied the claim of deduction for the payment made beyond the 3-year period. - On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO's decision, emphasizing that the unutilized amount should be taxed as per Section 54F(4) since the amount was not utilized within the stipulated period of 3 years. The CIT(A) relied on the Supreme Court's decision in Commissioner of Customs (Import) Mumbai vs. M/s Dilip Kumar and Company and Ors, which mandates strict interpretation of exemption provisions. Tribunal's Decision: - The Tribunal noted that the assessee failed to provide necessary documents to support the contention that the delay was due to the builder's failure to complete the construction on time. - The Tribunal agreed with the CIT(A) that the provisions claiming exemption must be interpreted strictly, following the Supreme Court's binding precedent. - Consequently, the Tribunal upheld the CIT(A)'s order, denying the exemption under Section 54F for the amount of Rs. 87,89,121/- and dismissed the appeal. Conclusion: The appeal was dismissed in its entirety. The Tribunal upheld the denial of the exemption under Section 54F due to the failure to utilize the amount within the prescribed 3-year period, emphasizing the strict interpretation of exemption provisions as mandated by the Supreme Court.
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