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TMI Blog2018 (3) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... ed benefit of set off as under: Capital gain x cost of new asset /Net sale consideration The cost of new asset was taken at 30 lacs only and in this, set off was granted upto 15,07,606/-. The balance i.e. total capital gain : 29,72,370 minus 15,07,606 = 14,64,764/- has been taxed at the rate of 20%. I allow this appeal and direct the AO to take cost of new asset at 70 lakhs instead of 30 lakhs and calculate the amount of capital gain, if any. In other words, there will be no capital gain for tax in the hands of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ner : Rs.5 alksh (c) Loan from ICICI Bank in the name of assessee : Rs.40 lakhs Total : Rs.75 lakhs The ld.AO has granted benefit under section 54F to the extent of ₹ 30 lakhs, but did not grant with regard to set off of loan amounts. In other words, assessee claimed set off of capital gain arisen on sale of land against the loan amount treating as uitilisation of capital gain for purchase of a house. This plea of the assessee has been rejected by the ld.Revenue authorities below. 4. The ld.counsel for the assessee while taking us through impugned order of the ld.CIT(A) has contended that the issue in dispute is squarely covered by the following decisions: i) ITO Vs. KC. Gopal, 170 taxmann 591 (Ker) ii) CIT Vs. Kapilkuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ruparel, 27 SOT 61. She further contended that the assessee availed loan from bank and purchased residential house. He has not used that very amount for the purchase of house. 7. We have duly considered rival contentions and gone through the record carefully. This issue has been considered in various cases as relied upon by the ld.counsel for the assessee. We deem it pertinent to take note of head-note of decision rendered by Hon'ble Kerala High Court as well as Hon'ble Punjab and Haryana High Court cited supra, which reads as under: Section 54 of the Income-tax Act, 1961 - Capital gains - Profit on sale of property used for residential purposes -Assessment year 1984-85 - Whether entitlement of exemption under section 54 relates to cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal and thereafter upheld it. The finding of the Hon'ble High Court in para-15 containing finding of the Tribunal reads as under: "15. It has been categorically recorded by the Tribunal that the assessee had made investment in between February 2008 upto August 2008 i.e. well within the stipulated period. The property was purchased for ₹ 3.32 crores whereas the shares which were sold had resulted in capital gain of ₹ 1.93 crores. The investment was more than the capital gain earned by him. The relevant finding reads thus:- "In the present case, the first date of capital gain is November 8, 2008. The assessee can acquire a house within a period November 8, 2007 upto November 2010 i.e. one year prior to transfer of ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assets, he will claim set off of the capital gains against the investment already made for the purpose of exemption under section 54F. Learned DR has relied upon an order of the ITAT reported in Sher Mohammad v. Dy. CIT (Inv.) [2009] 27 SOT 61 (Jodh.URO). In that case, the ITAT has held that if investment was made out of loan amount then exemption under section 54F(1) will not be available. In the opinion of the ITAT, the assessee has to demonstrate source of funds, if investment was made by the assessee from his own source and not from loan taken from the bank then exemption would be available. In our opinion, the section does not put any such restriction. Hon'ble Kerala High court has explained the position. Similarly, in a series o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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