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TMI Blog2018 (3) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee for his residential purposes, the benefit under section 54F cannot be denied merely because the assessee has purchased two houses. As regards the non deposit of the amount in the Capital Gain Account Scheme, we note that the assessee has sold the agricultural land on 30th November, 2012 and the house was purchased on 30.10.2014. Therefore, the investment made by the assessee is within two years from the sale of the existing asset and is not beyond the stipulated period as provided under section 54F of the Act. When the assessee has invested the amount within the stipulated period as provided under the provisions of section 54F, then the substantial requirement as per section 54F(1) is satisfied. - Decided in favour of assessee - ITA No. 1089/JP/2016 - - - Dated:- 13-3-2018 - SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM For The Assessee : Shri S.K. Gogra (CA) For The Revenue : Smt. Neena Jeph (JCIT) ORDER PER VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 27th September, 2016 of ld. CIT (A)-I pertaining to A.Y. 2010-11. The assessee has raised the following grounds of appeal :- 1. That order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of CIT(A) in confirming same may please be declared as illegal. 6. That the appellant craves leave to add, amend or alter any of the ground to this appeal. 2. The only issue raised by the assessee in this appeal is regarding disallowance of deduction under section 54F in respect of the investment made by the assessee in the house purchased on 13.10.2014. During the assessment proceedings, the AO noted that the assessee has claimed deduction of ₹ 1,47,72,482/- under section 54F and ₹ 53,27,518/- under section 54B of the Act against the long term capital gain from sale of agricultural land during the year under consideration. The AO further noted that the assessee has claimed deduction u/s 54F in respect of two residential house Nos. 784 and 784A, Devi Nagar, New Sanganer Road, Jaipur. As regards the deduction in respect of the residential house no. 784, Devi Nagar under section 54F and deduction under 54B for purchase of agricultural land, the same were allowed. However, the AO denied the deduction under section 54F in respect of the another house no. 784A, Devi Nagar. The AO has raised objection against the claim of the assessee on the ground that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 334 (Raj.). He has also relied upon the decision of the Hon ble Madras High Court in the case of CIT vs. Sardarmal Kothari, 302 ITR 286 (Mad.) and submitted that the requirement of provisions of section 54F is that the assessee within a period of three years after the date of transfer has to construct a residential house in order to become eligible for exemption. It is enough if the assessee establishes that the assessee has invested the entire net consideration within the stipulated period. He has also relied upon the decision of Hon ble Karnataka High Court in the case of CIT vs. K. Ramachandra Rao 277 CTR 522 (Kar.) and in case of Fathima Bai vs. ITO 32 DTR 243 (Kar.). Hence the ld. A/R has pleaded that when the assessee has complied with the conditions as prescribed under section 54F for investment of the net consideration within the stipulated period, then the deduction under section 54F cannot be denied. 3.1. On the other hand, the ld. D/R has relied upon the orders of the authorities below and submitted that the AO has allowed the claim of the assessee in respect of the investment made in the residential house within the stipulated period as well as in purchase of agric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 396 ITR 499 (Mad.) has held that benefit under section 54 for purchase of two adjacent flats as single residential unit cannot be denied. Accordingly, we are of the considered view that in the absence of denial of fact that these two properties are adjacent to each other and to be used by the assessee for his residential purposes, the benefit under section 54F cannot be denied merely because the assessee has purchased two houses. 5. As regards the non deposit of the amount in the Capital Gain Account Scheme, we note that the assessee has sold the agricultural land on 30th November, 2012 and the house was purchased on 30.10.2014. Therefore, the investment made by the assessee is within two years from the sale of the existing asset and is not beyond the stipulated period as provided under section 54F of the Act. The only objection raised by the AO and ld. CIT (A) is non deposit of amount in the Capital Gain Account Scheme. However, when the assessee has invested the amount within the stipulated period as provided under the provisions of section 54F, then the substantial requirement as per section 54F(1) is satisfied. The Hon ble Madras High Court in the case of CIT vs. Sardarmal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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. Again in the case of Fathima Bai vs. ITO (supra), the Hon ble Karnataka High Court has reiterated its view that once the entire capital gain was utiliz ..... X X X X Extracts X X X X X X X X Extracts X X X X
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