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TMI Blog2017 (3) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... e HUF, sold 122.840 carat of diamonds on 02.01.2012 for a total consideration of Rs.57,12,060/-. The long term capital gain computed at Rs.42,65,619/-. According to the Ld. representative, there was no dispute about sale of diamonds and the computation of long term capital gain at Rs.42,65,619/-. According to the Ld. representative, the assessee purchased a house property at door No.23, Llyods Road, First Land, Royapettah, Chennai - 14 along with three other coparceners of HUF on 14.10.2011 for a total consideration of Rs.1,35,00,000/-. 1/4th share of the assessee HUF comes to nearly Rs.38,08,750/-. The purchase of property along with other coparceners of HUF is also not in dispute. According to the Ld. representative, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enied on that ground. Therefore merely because the property was registered in the name of the Karta of HUF, the Assessing Officer cannot disallow the claim of deduction under Section 54F. 3. Referring to the utilization of borrowed funds, the Ld. representative for the assessee submitted that the property was in fact purchased on 14.10.2011 before 2½ months of the sale of diamond on 02.02.2012. Therefore, the assessee cannot use the sale proceeds of the diamond for purchasing the property. In other words, the sale proceeds cannot be utilized before the diamond was actually sold. Referring to Section 54F of the Act, the Ld. representative submitted that Section itself provides for investment in the immovable property within a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a reason for allowing the claim of the assessee. Moreover, even though the assessee claims that the capital asset was renovated after purchase, the assessee has not obtained any approval from the Corporation of Chennai. Therefore, the Assessing Officer has rightly disallowed the claim of the assessee which was confirmed by the CIT(Appeals). 6. We have considered the rival submissions on either side and perused the material available on record. The assessee sold a capital asset namely diamond and claims exemption on the capital gain under Section 54F of the Act. The Assessing Officer rejected the claim of the assessee on three grounds. 1) First, the capital asset was purchased in the individual name of coparcener of HUF. 2) Borrowed fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided in the Act, the same has to be deposited in any one of the capital gain account within the due date provided for filing the return of income under Section 139(1) of the Act. No one could expect the assessee to utilize the sale proceeds of the capital asset or the capital gain arising from such sale before the date of the sale of the capital asset. The assessee cannot have any sale proceeds before the date of the sale. Therefore, this Tribunal is of the considered opinion, when the assessee borrowed the funds and utilized in purchasing the capital asset and thereafter uses the sale proceeds or capital gain for repaying the loan borrowed, that would amount to sufficient compliance of the requirement of Section 54F of the Act. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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