9911796707
TMI Blog2013 (7) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... g that assessee is not entitled for exemption under sec. 54F(1) of the Income-tax Act, 1961 for a sum of 121,32,636. The investment of the assessee is more than the capital gain earned by him. Therefore, we allow the appeal of the assessee and delete the addition of 121,32,636 in the total income of the assessee under the head "long term capital gain". X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) has reproduced the letter submitted by the assessee in paragraph No. 4.1. This letter explains the case of the assessee explicitly and it is worth to take note of this letter in order to appreciate the facts and circumstances in more scientific way. Relevant part of this letter reads as under: "1. Facts of the Case 1.1 Date of Capital Gains Date Amount (Rs.) Remarks Nov. 8, 2008 14,68,066 As shown in Computation of income enclosed at P. No. 5 of submission dated Sep. 3,2012. March 16,2009 1,78,82,620 -Do- Total Capital Gain 1,93,50,686 1.2 Date of Investment in House Property. The assessee purchased a hour property situated at Flat No. 601, 6th Floor, Pacific Heights, Village Danda, Sherly Rajan, Bandra (West), Mumbai-400050 at a total cost of ₹ 322.49 lacs and the details of payment are given hereunder: Date Amount Paid to Source of Fund 21/02/2008 11,00,000 Rizvi Land Development Pvt. Ltd. HSBC Bank 18/04/2008 1,00,00,000 -do- Loan taken from Apollo International Ltd. 10/07/2008 1,00,00,000 -do- -do- 10/08/2008 50,00,000 -do- -do- 08/09/2008 44,00,000 -do- HSBC Ltd. 28/07/2008 15,07,600 Draft for Stamp duty -do- 28/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission made by the appellant, it is seen that the property in question has been purchased by making payments from the period starting 7th November 2004 to August 2008. The offer of possession of the apartment was given on 29 January, 2008. The property has been registered on 05.05.2008. As per Section 54 of the Act the capital gain earned from sale of a residential house is not chargeable to tax if the assessee purchases within a period of one year before or two years after the date of transfer or constructs within a period of three years after the date of transfer, a house property." 5. Learned First Appellate Authority took into consideration the submissions made by the assessee as well as sec. 54F of the Act. Learned CIT (Appeals) has observed that two sub-sections of section 54F of the Act are relevant for the present controversy. She made reference to sec. 54F(1) and 54F(4) of the Act. According to the Learned CIT (Appeals), section 54F(1) lays down the condition for allowability of exemption and the extent of exemption that can be claimed. This section provides that the amount of capital gain that can be exempted under this section is equal to the difference between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 86 2. Decision of the Hon'ble Kerala High Court in the case of ITO v. KC Gopalan [1999] 107 Taxman 591 3. Order of ITAT, Chennai in the case of Parkside holding Ltd. v. Dy. CIT [2003] 86 ITD 252; 4. Order of ITAT, Mumbai in the case of Bombay Housing Corpn. v. Asstt. CIT [2002] 81 ITD 545; 5. Order of ITAT, Mumbai in the case of Dy. CIT v. Gaylord Investments & Training [2008] 21 SOT 407; 6. Order of ITAT, Mumbai in the case of Asstt. CIT v. Dr. P.S. Pasricha [2008] 20 SOT 468; 7. Order of ITAT, Hyderabad in the case of Muneer Khan v. ITO [2010] 41 SOT 504; 8. Order of ITAT Kolkata Bench in the case of Lalit Marda v. Asstt. CIT [2008] 23 SOT 250; and 9. Decision of Hon'ble Gauhati High Court in the case of CIT v. Rajesh Kumar Jalan [2006] 286 ITR 274 7. On the other hand, Learned DR relied upon the orders of the revenue authorities. She contended that section 54F does not provide that a person shall avail loan, purchased a house and then set off that loan amount against the capital gain earned on sale of a capital assets subsequent to the purchase of an assets. She pointed out that assessee took a loan of ₹ 2.5 crores. He is setting off the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is chargeable under the head 'Income from house property'. Explanation.-for the purposes of this section- 'Net consideration,' in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) and (3)** ** ** (4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilized by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilized in accordance with, any scheme which the Central Government may, by notification in the Official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the new assets made within one year before the date of transfer of the original assets or not utilized by him for purchase or construction of the new assets then before the date of filing of the return of income under sec. 139, shall be deposited by him in any bank or institution specified by the Central Government. If assessee fails to make deposit then exemption under sec. 54F sub-section (4) will not be available. If we read both these sub-sections together then, it would reveal that in order to avail the benefit of section 54F, the assessee is required to either purchase a residential house out of the sale proceeds or long term capital assets 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. In such cases, gain shall be computed as per clauses (a) and (b) of sub-section (l). In case, the assessee is not able to appropriate the sale proceeds of long term capital gain then, before filing of a return under sec. 139, he is required to deposit the same in any capital gain account with a bank or institution specified by the Government in an official gazettee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
