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TMI Blog2018 (12) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... , we do not find any infirmity in the order of the CIT(A) in directing the AO to grant exemption u/s 54F to assessee as his decision is in consonance with the decisions of Hon’ble High Courts and ITAT and accordingly we uphold the order of CIT(A) and dismiss the grounds raised by the revenue. - decided in favour of assessee. - ITA No. 2133/Hyd/2017 - - - Dated:- 29-11-2018 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Revenue : Shri Sunku Srinivasu For The Assessee : Shri Narahari Biswal ORDER PER S. RIFAUR RAHMAN, A.M.: This appeal filed by the Revenue is directed against the order of CIT(A) 7, Hyderabad, dated 04/09/2017 for AY 2013-14. 2. Brief facts of the case are, the assessee an Individual, engaged in the business of Civil Work contracts, deriving commission from Tata Tele Services Limited for running telephone booth, and income from running a ration shop, commission income earned from travel agency and interest on fixed deposits, filed his Return of Income for A.Y.2013-14 on 06-01-2014 admitting total income of ₹ 9,30,070/-. The case was selected for scrutiny under CASS and notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall 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 sub-section (1) of section 139) in an account in any such bank or institution as may be specified in and utilised in accordance with/ any Scheme which the Central Government may, by notification in the Official Gazette/ frame in this behalf and such return shall be accompanied by proof of such deposit: end. for the purpose of sub-section (1), the amount, if any, already utilised by this assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset;. 2.2 The AO observed that in the instant case, the assessee has not deposited the net consideration in the capital gains account scheme as stipulated in sec. 54F before the due date of furnishing of the return of income u/s. 139(1) i.e. in assessee's case is 31.07.13. Since the assessee has not complied with the provisions of sec. 54F, the exemption u/s. 54F claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of AO, the assessee preferred an appeal before the CIT(A) and filed written submissions before the CIT(A), which were extracted by the CIT(A) in his order at pages 14 to 19. 4. After considering the submissions of the assessee, the CIT(A) directed the AO to grant exemption u/s 54F to the assessee by observing as under: 6.2 I have considered the submissions of the appellant and findings of the AO carefully. The date of conversion of the capital asset into the stock in trade in the present case is 16-1- 2012. The residential layout consists of 73 plots of different sizes and the total area comes to 12191 sq. Yds. after leaving the balance of 6441 sq. yds. for roads and other amenities. The appellant's share in total value of sale consideration comes to ₹ 1,14,76,800/-. The Assessing Officer computed the assessee's share of indexed cost of acquisition at ₹ 16, 72,927/-. The net long term capital gain before exemption u/s.54F of the I.T. Act comes to ₹ 98,03,873/ -. Regarding the claim of exemption u/s.54F of the I.T. Act, the AO's first contention was that the appellant is not eligible for exemption u/s.54F on the ground that the net co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of allowing deduction u/s.54F of the I.T.Act. The Hon'ble Punjab and Haryana High Court in the case cited supra held that the provisions of Sec.54F(4) of the Act are pari -materia with Sec.54(2) of the I.T.Act while delivering the judgement. The Hon'ble High Court of Bombay in the case of Humayun Suleman Merchant reported in 387 ITR 421 upheld the view of the Assessing Officer in restr icting the claim of exemption u/s.54F of the I.T.Act proportionately to the amount invested. Respectfully, following the ratios of the judgement of Hon'ble High Court of Punjab and Haryana and Hon'ble High Court of Bombay cited supra, I am of the considered view that the appellant is eligible for claim of deduction u/s.54F as he has invested entire net consideration before actual date of filing of return of income i.e.06-01-2014. Therefore, the appellant succeeds on the issue of utilisation of the net consideration before the due date of filing of return u/s 139(4). 6.2.1 Regarding the 2nd issue, it was stand of the AO that the assessee had invested in two new flats as against one flat as required u/s.54F(I) of the I.T. Act. It was the stand of the AR of the assessee that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears as mentioned u/s.54F of the I.T. Act. On this issue, the AR of the assessee brought to my attention the CBDT Circular No.471 dated 15-10-1986 clarifying that payment made to the builder is a sufficient compliance for claim of exemption u/s.54F and also various decisions of the High Courts cited in Para 6.14 and 6.15 of the letter dated 12-5-2017. I have considered the above submissions made by the AR of the assessee and also facts of the case. I find that the ratio of the decisions cited by the AR of the assessee on this issue and CBDT Circular 471 clearly specify that payment to the builder/developer is sufficient ground for claim of exemption u/s.54F. The jurisdictional Tribunal in the case of Narasimha Raju Rudra Raju reported in 35 Taxmann.com 90 ITAT Hyderabad (or) in ITA NO.234/Hyd/2012 for A.Y.2008-09 held in Para 12 as under: In various judicial precedents as also in the decision cited before us by the learned AR, it has been held that the condition precedent for claiming benefit ujs.54F is the capital gain realized from the sale of capital asset should have been parted by the assessee and invested either in purchasing a residential house or in constructing a re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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