9911796707
TMI Blog2006 (6) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Therefore, in our consideration, in respect of residential property till cost of purchase of flat is exhausted by the claim of the capital gain but remaining in the time-frame stipulated in section 54F, deduction cannot be denied. If assessee falls out of the time-limit in section 54F then probably department can have a case. The ld. CIT(A) has dismissed the appeal of the assessee by interpreting sub-section (4) by holding that assessee has not appropriated the sale consideration towards purchase of flat, but ld. CIT(A) has ignored the main provisions of section 54F. Sub-section (4) has been inserted with a view to facilitate the assessee to claim the capital gain exemption when assessee opts for purchase of flat after arising of the cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears i.e. 1995-96 and 1996-97, capital gain has arisen to the assessee in respect of sale of shares and assessee has sought deduction under section 54F in those years also in respect of purchase of same residential flat. The Assessing Officer was of the view that since the assessee has already claimed deduction under section 54F in assessment year 1995-96, the assessee cannot claim deduction in respect of same residential flat in the relevant assessment year. Therefore, the Assessing Officer denied deduction under section 54F to the assessee in the relevant assessment year. For the sake of better understanding, transaction of sale of shares, capital gain and deduction claimed by the assessee is depicted hereunder in the form of chart : F.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r new residential within three years. The ld. CIT(A) decided the issue against the assessee considering sub-section (4) of section 54F by observing that as assessee has not appropriated the sale consideration towards purchase of flat in the relevant assessment year, deduction under section 54F cannot be allowed to the assessee. The ld. CIT(A) decided the issue only considering sub-section (4) of section 54F making it as a central issue. Aggrieved by the order of ld. CIT(A), the assessee has come in appeal before us. 5. The ld. AR reiterated the same submissions as were made before ld. CIT(A) and further argued that as per the language of section 54F if assessee purchased the flat within one year before or within two years of the arising of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee having capital gain in assessment years 1995-96, 1996-97 and 1997-98 have claimed deduction for all these three years as per chart given above, which shows that in total the assessee has claimed deduction not more than Rs. 9 lakhs. In our consideration, there is no bar in section 54F for claiming deduction for the same property if cost of the flat is within the capital gain arisen to the assessee. In this case, total capital gain arisen to the assesee in all these three years is Rs. 7,48,061 against the cost of flat Rs. 9 lakhs. Now to examine the case of the assessee from the language of section 54, it will be useful to reproduce section 54F as under : "54F. Subject to the provisions of sub-section (4), where, in the case of an ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilized by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset." We find that from the language of section, Legislature has provided leverage to the assessee for claiming deduction under section 54F in the sense that assessee can buy the property first and claim deduction later on i.e., within one year or can have capital gain first and can claim deduction within two years by purchasing the residential flat. In all these three assessment years, these conditions were satisfied. Therefore, in our consideration, in respect of residential property till cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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