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TMI Blog2003 (12) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gain thereon. During the course of assessment proceedings, the assessee however came up with the claim for exemption under s. 54 of the IT Act on the ground that a new residential house has been constructed by the assessee at E-23, DLF, Phase-I, Gurgaon, on plot of land which had been earlier purchased in the year, 1993. As per valuation report for the newly constructed house filed by the assessee, the construction commenced in March, 1995 (sic-March, 1994) and was completed on15th April, 1995. The assessee stated before the AO that the occupation certificate for the abovesaid property at E-23, DLF, was obtained on6th March, 1995. According to the assessee, the assessee s family had constructed a new house out of the sale proceeds of the old house and further that even though the occupancy certificate of the new house is dt.6th March, 1995, the house was actually completed on15th April, 1995, i.e., after the date of the sale of the old house which is3rd April, 1995. The AO however, rejected the claim of exemption under s. 54 mainly on the following grounds: (i) Regarding purchase of land since land has been purchased in December, 1993, whereas the old property has been sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... started on13th March, 1994and it was completed on15th April, 1995, when the sewer connection had been obtained from the Director, Town and Country Planning, Haryana. He filed before us copy of the occupation certificate as well as certificate from Duggal and Associates, architects, wherein it has been pointed out that HUDA issued certificate of occupancy after the construction has been completed and application in Form No. BR-4 has been made to the Estate Officer, HUDA. Application for sewer connection is thereafter furnished to HUDA enclosing therein the occupancy certificate and only after getting sewer connection, it can be said that construction has been completed and the house has become habitable. In support of his contention learned counsel placed reliance on the following decisions: (i) CWT vs. K.B. Pardhan (1981) 130 ITR 393 (Ori) (ii) R.B. Jodha Mal Kuthiala vs. CIT (1971) 82 ITR 570 (SC) (iii) Bajaj Tempo Ltd. vs. CIT (1992) 104 CTR (SC) 116 : (1992) 196 ITR 188 (SC) (iv) Mrs. Seetha Subramaniam vs. Asstt. CIT (1996) 56 TTJ (Mad) 417 : (1997) 93 Taxman 227 (Mad)(Mag) (v) Smt. Kalwanti D. Alreja vs. ITO (1996) 54 TTJ (Bom) 593 : (1997) 94 Taxman 116 (Bom)(Mag) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . BR-IV under regulation No. 11(i) has to be made to the Estate Officer, HUDA. 2. A statement from the architect, supervising the construction, stating that the construction has been completed in accordance with rules has to be attached to the application. 3. A copy of the sanction letter issued by the Town Planner s office at the time of sanction of building plans has to be attached to the application. 4. The HUDA inspectors will physically inspect the building and point out violations of rules and require modifications and impose compounding fee. 5. After the compounding fee is paid, HUDA may issue a "Certificate of occupancy." 6. A copy of the above "Certificate of occupancy" must accompany the application for sewer connection. 22nd Oct., 2003 Sd/ D.K. Duggal Architect, Engineer, Valuer" 7. From the aforesaid discussion it is amply evident that construction of the house has been completed before6th March, 1995. Thus, for the purposes of s. 54(1) it clearly follows that the construction of the residential house has been completed before the sale of the old house and the basic conditions for allowing exemption under s. 54 are not fulfilled under the instant cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, the construction of the new house is to be made within the period of 3 years and not two years from the date of transfer of the old house. The ratio ofGujaratdecision, therefore, clearly applies and the Revenue has rightly disallowed claim of deduction under s. 54 to the assessee. Regarding the various decisions cited by the learned counsel, we have gone through these decisions and find that these are clearly distinguishable and render no assistance to the case of the assessee. 9. Regarding the liberal interpretation of an exemption provisions, the rules of liberal interpretation would be liable to be invoked if the words of the statute are not clear and contained ambiguity. However, the preposition is well-settled that if the words of the statute are clear and admit of no ambiguity or doubt then the intention of the legislature has to be gathered from the words used in the statute. This is a cardinal principle of interpretation. The language used in s. 54(1) is unambiguous and clear. The relevant portion of the section reads: "The assessee has within a period of one year before or two years after the date on which the transfer took place purchased or has within a perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are distinguishable on the facts and issues involved and do not help the assessee. For the aforesaid reasons, we allow ground No. 1 and hold that assessee is not entitled to deduction under s. 54. Ground No. 1 is allowed. 14. Ground No. 2 is against the direction of the CIT(A) to allow expenditure of Rs. 1,20,000 claimed as brokerage on the sale of the residential house. AO has dealt with the issues vide para 14 of the assessment order and the CIT(A) has disposed of the issue vide paras 7, 8 and 9 of the appellate order. Brokerage/commission has been claimed on the sale of the house as under: Shri Daljeet Singh Rs. 50,000 Shri Daljeet Singh Rs. 50,000 Shri Man Mohan Rs. 20,000 15. Regarding payment of brokerage to the aforesaid persons, the AO called upon the assessee to file documentary evidence in support of the brokerage. The assessee filed copies of bank certificates indicating that cheques have been issued for payment. The AO observed that mere filing of the bank certificate is not sufficient inasmuch as it is not verifiable whether the names appearing in the bank certificates (are) property brokers who transacted the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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