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TMI Blog2015 (4) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... to purchase a residential house. It is not the requirement of law that he should purchase a residential site and then putup construction. Therefore, in the instant case admittedly the assessee has purchased a vacant site pri-31.3.2001. He sold the original asset on 27.8.2003 on which date he was already owning a site. In fact even before sale of the original asset he had started construction on such site by availing loan from the Bank. In terms of Section 54F(1) all investments made in the construction of the residential house of the said site within a period of one year prior to 27.8.2003 would be eligible for exemption under Section 54F(1). Similarly all investments in the said construction after 27.8.2003 within a period of three years therefrom is also eligible for exemption. Therefore, the argument that such investment in putting up a residential construction cannot be made on a site owned by him to be eligible for exemption is without any substance. Both the Appellate Authorities have rightly extended the benefit to the assessee and there is no error committed by them which calls for interference. - Decided in favour of assessee. Assessee invests the entire sale consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2005 i.e. on 31.3.2005 a sum of ₹ 31,00,000/- has been contributed towards house construction. Till that date a loan of ₹ 2,10,00,000/- was taken from Bank which was also utilized for construction. Therefore to the extent of 1,36,00,000/- he claimed exemption for construction of the house. After considering the said reply the Assessing Authority held the assessee has admitted that the land sold is a capital asset. The assessee claimed exemption under Section 54F to the extent of 1,63,23,064/-. He also claimed that he has utilised 1,36,00,000/- for house construction. On the ground that the assessee has not furnished how much amount was in fact utilized for construction after the date of sale, the claim of the assessee for claiming exemption was not accepted. The assessee claimed to have utilized 14,00,000/- in the previous year towards house construction. It is not clear as to whether the amount of ₹ 1,36,00,000/- claimed to have been spent for house construction is inclusive of 14,00,000/- spent earlier. Further it was held the assessee ought to have deposited the unutilized sale consideration in a Bank account under the Capital Gains Accounts Scheme. It has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where - (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 the 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 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, already utilised 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: Provided that the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then, - (i) the amount by which - (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1), exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transfer of residential asset or constructs any residential house other than the new asset within a period of three years after the date of transfer of the residential asset. In the entire scheme there is no prohibition for the assessee putting up construction out of sale construction received by such transfer of a site which is owned by him as is clear from the language used. It is open for the assessee to put up a residential construction or to purchase a residential house. It is not the requirement of law that he should purchase a residential site and then putup construction. Therefore, in the instant case admittedly the assessee has purchased a vacant site pri-31.3.2001. He sold the original asset on 27.8.2003 on which date he was already owning a site. In fact even before sale of the original asset he had started construction on such site by availing loan from the Bank. In terms of Section 54F(1) all investments made in the construction of the residential house of the said site within a period of one year prior to 27.8.2003 would be eligible for exemption under Section 54F(1). Similarly all investments in the said construction after 27.8.2003 within a period of three years ..... X X X X Extracts X X X X X X X X Extracts X X X X
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