9911796707
TMI Blog2012 (9) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... for the sake of convenience. 2. Effective grounds of appeal of the assessee, as taken from appeal ITA No.1866/Hyd/2011, read as follows- 1) The learned Commissioner of Income-tax(Appeals) is not justified in sustaining the disallowance of Rs.50,05,530 made by the Assessing officer. 2) The learned First Appellate Authority is not justified in sustaining the disallowance of the deduction U/s. 54F in relation to the amounts deposited in capital accounts scheme out of the borrowed funds. 3) The learned First Appellate Authority failed to appreciate the fact that the provisions of U/s. 54F do not require the same sale proceeds to be utilized to claim deduction U/s. 54F. 4) The learned Commissioner of Income-tax(Appeals) is not justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Act, the assessing officer opined that as per subsection (1) and sub-sec.(4) of S.54F of the Act, in order to avail the benefit under S.54F, an assessee is required either to purchase a residential house out of the sale proceeds of the long term capital asset within a period of one year before or two years after the date on which transfer took place, or within a period of three years after that date construct a residential house. The assessing officer further noted that when the sale proceeds or the capital gain accruing to the assessee is not wholly appropriated towards the purchase of the residential house within the specified period, he is required to deposit the same in the Capital Gains Account Scheme, 1988, before the due da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,09,23,880, and the long term capital gains disclosed after deducting incidental expenditure, etc. is Rs.3,03,77,343. Out of this amount of Rs.3,03,77,543/-, the assessing officer noticed borrowed funds to the extent of Rs.33,46,333/- having been deposited by the assessee in the Capital Gains Account Scheme, 1988, which was claimed to have been borrowed by the assessee from Shri J.V.Laxman Rao. In these facts of the case, the assessing officer restricted the assessee's claim for relief under S.54F to the amount of Rs. 2,70,82,018, disallowing the balance claim of Rs.32,95,555 invested in the Capital Gains Account Scheme, 1988 by borrowing the same from Shri J.V.Laxman Rao. On appeal, the CIT(A) upheld the disallowance made by the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties and perused the orders of the lower authorities. We have also perused the case-law relied upon by the learned counsel for the assessee. The point in dispute before us is when the assessee undisputedly earned capital gains and when the deposited equivalent amount in the bank under Capital Gains Accounts Schemes, whether the assessing officer is justified in denying benefit of S.54F on the ground that part of such deposit has source in borrowal of funds and part of such gains is diverted elsewhere for other purposes. On this, we find that this issue is covered by the decision of the Hyderabad Bench of Shri Muneer Khan (supra), wherein it has been held that money has no colour and all that is required to be eligible for relief under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the capital gains earned by the assessee can be utilised for other purposes, and as long as the assessee fulfils the condition of investment of the equivalent amount in the scheme specified or in the asset qualifying for relief under S.54F, by securing the money spent out of the capital gains or from other sources available to it either by borrowal or otherwise, and the assessees are eligible for relief under S.54F of the Act in respect of the entire amount of capital gains so deposited. In the circumstances, we find merit in the contentions of the assessees that inasmuch as they have made deposits of the amounts equivalent to the capital gains realized in the Capital Gains Investments Accounts, even though part of those capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
