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TMI Blog2014 (3) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... upon CIT vs. J.R. Subramanya Bhat [1986 (6) TMI 7 - KARNATAKA High Court] - it was immaterial that the construction of the new building was started before the sale of the old building - Revenue could not bring any contrary material on record to controvert the findings of CIT(A) – thus, there is no reason to interfere with the order of CIT(A) – Decided against Revenue. - I.T. A. No. 136/AHD/2011 - - - Dated:- 21-2-2014 - Shri D. K. Tyagi, J. M And Shri Anil Chaturvedi, A.M.,JJ. For the Appellant : Shri J. P. Jhangid, Sr. D. R. For the Respondent : Shri G. C. Pipara ORDER Per Shri Anil Chaturvedi,A. M. 1. This appeal is filed by the Revenue against the order of CIT(A)-XIV, Ahmedabad dated 07.10.2010 for A.Y. 2007-08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34.50 lacs towards made investment in new residential property from 27.03.2006 to 24.06.2007, A.O. noticed that Assessee had started construction of new residential property before the date of transfer of aforesaid land (i.e. 26.03.2007) and that the payment of Rs. 17.5 lacs towards the purchaser on new property was made before the date of transfer of property on which capital gain was claimed. Thus according to the A.O., the amount invested prior to the date of sale of original asset was not eligible for deduction under section 54F and therefore the amount invested in purchase of new property was disallowed and added back to the total taxable capital gain. A.O. was further of the view that Assessee was eligible for deduction under 54F onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years after the date of transfer of the original asset or construct a residential house property such that the construction should be completed within 3 years from the date of transfer of the original asset. That from the above conditions mentioned in Section 54F of the Act, I find that in so far as construction of the house property is concerned, the stress laid down by the legislature is on completion within the period of 3 years from the date of transfer of the original asset and the legislature is silent about the date of commencement of the construction of house property. Had it been the intention of the legislature to restrict the exemption only to the extent of investment made after the date of transfer the original asset, it would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date of transfer. Accordingly, argument of the learned A.R. that the question of disallowance of any capital gain on the reasons mentioned by the A.O. does not arise since the same being contrary to the legal position and legislative intent has sufficient force. 5.3 Thus, it is implied that when the legislature itself qualifies investment in new residential property one year prior to the date of transfer for the purpose of claiming/ deduction u/s.54F of the Act, the question of restricting the exemption u/s. 54F of the Act to the extent of investment made after the receipt of sale consideration does not arise and would be contradictory to the analogy of Clause (a) as discussed hereinabove. It is contended that the same analogy is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment made during the period 27/3/2006 to 13/10/2006 aggregating to Rs.17,50,000/- will also be eligible for deduction u/s.54F as the condition of one year before and two years after the sale is duly complied with. The claim of the appellant also finds support from the decision of various courts of law as cited in his written submissions filed before me. The Allahabd High Court in the case of CIT Vs. H. K. Kapoor (Deed.) LR High Court of Allahabad (1998) 150 CTR 128 (All) has clearly held that the Exemption on capital gains under s.54 could be allowed notwithstanding the fact that the construction of the new house had begun before the sale of the old house. The said proposition of law also finds support in the case of the Karnataka High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave heard the rival submissions and perused the material on record. The issue in the present appeal is with respect to allowability of deduction u/s.54F. We find that CIT(A) while allowing this deduction has given a finding that Assessee had executed sale deed for sale of land at Jayendra Park Housing Society on 26.03.2007 for Rs. 60 lacs and the transfer as per definition u/s. 2(47) and Section 45 of the Act was 26.03.2007. He has further given a finding that the payments aggregating Rs. 17.50 lacs made during the period 27.03.2006 to 13.10.2006 is also eligible for deduction u/s 54F as the condition of one year before and two years after the sale is duly complied with. He has further noted that investment during the period 26.03.2006 to 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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