9911796707
TMI Blog2012 (3) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... were issued to the assessee. In response to the above notice, the authorised representative of the assessee appeared and submitted the details called for. The said details disclosed that during the year relevant to the assessment year 2006-07, the assessee sold the shares of M/s. Assess Technologies India Pvt. Ltd. for a consideration of Rs. 4,18,08,725/-. Part of the proceeds of the said sale consideration has been invested in purchase of house property to the extent of Rs. 2,16,61,570/- and accordingly claimed exemption under Section 54F of the Act. Necessary inquiries in this regard were conducted by the Revenue. The report was submitted on 3.12.2008. The report disclosed that Villa No. 58, Adarsh Palm Retreat, Outer Ring Road, Marathaha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to speak of residential house. It is neither been purchased nor constructed in the true sense of the term. Hence the assessee is not eligible to the benefit under Section 54F of the Act. Therefore, he dismissed the appeal. Aggrieved by the said order, the assessee preferred an appeal to the tribunal. 4. The Tribunal held that the material on record discloses that there was no dispute with regard to the fact that the assessee had invested Rs. 2,16,61,670/- as on 31.10.2006 within twelve months from the date of realization of sale proceeds of shares. The builder's letter set out the details of payment made by the assessee to the builder. Further, it disclosed that substantial construction was completed as on 12.11.2008 i.e., within three y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the benefit under section 54F of the Act. 8. Per contra, learned counsel for the assessee submitted that no doubt the building was not complete in all respects and the sale deed was not executed within three years, but within the period of three years, the assessee has invested a sum of Rs. 2,l6,61,670/- in construction of the building. After three years period, sale deed is executed in his favour. He has been put in possession and he is living in the said premises. In those circumstances, the Tribunal was justified in extending the benefit of section 54F of the Act to the assessee and therefore no case for interference is made out. 9. Section 54F of the Act provides for exemption from payment of capital gain on transfer of certain c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property." Explanation : For the purposes of this section, "net consideration", in relation to the trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid sections which form part of section 54 of the Act are cases where capital gain on transfer of capital asset not to be charged in those cases. Section 54F of the Act is a beneficial provision of promoting the construction of residential house. Therefore, the said provision has to be construed liberally for achieving the purpose for which it was incorporated in the statute. The intention of the Legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of law. The words used in the section are 'purchased' or 'constructed'. For such purpose, the capital gain realized should have been invested in a residential house. The condition precedent for claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transfer, has to construct a residential house in order to become eligible for exemption. In the cases on hand, it is not in dispute that the assessees have purchased the lands by investing the capital gain and they have also constructed residential houses. In order to establish the same, the assessees submitted before the CIT(A) several material evidences, viz., invitation card printed for the house warming ceremony to be held on 12th July, 2003. The assessees have also produced the completion certificates from the municipal authority on 30th Jan., 2004. On the basis of the above documents, the CIT(A) concluded that the requirement of the statutory provision has been complied with by the assessees and that was reconfirmed by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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