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TMI Blog2016 (9) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... 'the Act'). 2. The assessee has raised the following grounds of appeal:- ''2.1 The Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing Officer in denying claim for exemption u/s. 54F of the IT Act. 2.2 The Commissioner of Income-Tax (Appeals) failed to note that what had been acquired by the assessee is a residential property and as such exemption u/s.54F is rightly allowable. 2.3 The Commissioner of Income-Tax (Appeals) failed to consider the facts of the case and the submissions made before him in the proper perspective''. 3. The Brief facts of the case are that the assessee is a proprietor of M/s. First Computers and in the business of trading, Hiring computers and computer peripherals filed Retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, Waterland Drive, Kottivakkam, Chennai. The payments are made in the year 2007 being Rs. 77,00,000/- on 29.11.2007 and Rs. 23,00,000/- on 06.12.2007, total aggregating to Rs. 1,00,00,000/- and the sale deed was registered on 24.09.2010. These payments are made prior to sale of residential house property in the year 2009. The assessee claimed exemption u/s.54 of the Act on investment of capital gains in Residential property and has not deposited amount in Capital Gains Deposit Scheme before due date u/sec. 139(1) of the Act. The ld. Assessing Officer relied on the provisions of Sec. 54(1) & (2) of the Act and the conditions stipulated were the assessee has to purchase a new asset one year before or two years after transfer of sale of orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidential house''. The ld. Assessing Officer issued show cause notice to assessee for denial of exemption u/s.54 of the Act vide order sheet noting dated 08.03.2013 and 13.03.2013. In compliance, the ld. Authorised Representative vide letter dated 11.03.2013 filed explanations that the assessee claimed exemption by investing the net consideration in adjacent plot on which residential house is situated and the land is appurtenant to the Building and relied on the decision of Delhi Bench of Tribunal in the case of Addl. CIT vs. Narendra Mohan Uniyal (34 SOT 154). The ld. Assessing Officer distinguished the decision with the present case as the assessee has constructed Residential house in the year 2003 and no activity of construction took pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sec. 54 of the Act and the ld. Commissioner of Income Tax (Appeals) concurred with the findings of the ld. Assessing Officer and dismissed the appeal. Aggrieved by the Commissioner of Income Tax (Appeals) order, the assessee assailed an appeal before Tribunal. 5. Before us, the ld. Authorised Representative of assessee argued that Commissioner of Income Tax (Appeals) has erred in confirming the findings of the ld. Assessing Officer irrespective of submission of evidence and the assessee is eligible for exemption of residential house as the sale proceeds were utilized. The ld. Authorised Representative explained that it is a continuous process of construction on the plot of residential house and being part of land apparent to building t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or two years after the date on which the transfer took place purchased], or has within a period of three years after that date [constructed, a residential house], then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain [is greater than the cost of [the residential house] so purchased or constructed (hereafter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . : During Aug 2009 to Jan 2010. We on perusal of the facts and documentary evidence found that the first criteria the assessee should invest the Long Term Capital Gains in residential house within stipulated period. The definition of ''Residential house'' for exemption u/s.54 of the Act has to be construed with liberal meaning ''Denotes the place where the assessee eats, drinks and sleeps and should be understood in the normal sense for claiming benefit u.s.54(1) of the Act and the said definition was dealt by Hon'ble Karnataka High Court in the case of South Kanara Central Co-Operative Wholesale Stores vs. CIT (1978) 114 ITR 0298 were it was held that Sec. 54 of the Act applies to natural persons only and not to artificial pers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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