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TMI Blog2016 (5) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Dharampal Maini, Adv Revenue by: Sh. K. K. Jaiswal, DR ORDER Prashant Maharishi, 1. This is appeal filed by the assessee against the order of the ld CIT (A)-12, New Delhi dated 18.11.2015 for the Assessment Year 2010-11. 2. The assessee has raised the following grounds of appeal:- 1. That the order passed by the Assessing Officer as upheld by the CIT(A) are perverse to the law and to the facts of the case, while restricting the exemption claimed u/s 54 of the Income Tax Act, 1961, to the extent of ₹ 6,00,000/-. 2. That the Assessing Officer has failed to appreciate that the balance amount out of the sale consideration was further spent for the renovation / repairs of new property purchased, as such the income from capital gain was declared NIL after claiming deduction u/s 54 of the Act. 3. That the CIT(A) was wrong while uphold the additions made by the Assessing Officer, because of not passed the speaking order after taking into consideration the material available on the records. 4. That the restriction of the claim of deduction u/s 54 is further against the law and to the facts of the case as the Assessing Officer has already examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 54 of the Act. 7. Ld DR relied on the order of the lower authorities and submitted that assessee is not eligible for deduction as borrowed funds have been utilized for purchase of new house. 8. We have carefully considered the rival contentions. We have carefully perused the decision on which ld. AO and CIT (A) has relied very heavily of Mumbai bench of tribunal in case of Milan Sharad Ruparel V ACIT [2010] 5 ITR (Trib) 570 (ITAT[Mum]) and some of the observation of that decision are as under :- 14. The object of introduction of these sections is that the assessee should make more investments in residential house, on sale of its old residential house or a long-term capital asset. It is not necessary that the same funds must be used in purchase of the new residential house, but, the fund should be available with the assessee for its investment in the residential house. Since the law permits utilisation of capital gain within the specified time, the assessee may use such funds for other purposes and may find resource from other source for investment in time. The law does not expect that the sale amount should be kept in the locker and the same should be utilised in purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer. 16. This similar view was again expressed by the Tribunal in the case of Mrs. Prema P. Shah [2006] 282 ITR (AT) 211 (Mumbai) ; 100 ITD 60. It was held that there is no requirement of law that same amount of sale consideration should be utilised for acquisition of property for claiming exemption under section 54 of the Act. The Tribunal placed reliance upon the order of the Tribunal in the case of Bombay Housing Corporation [2002] 81 ITD 545 (Mumbai). But, this case pertains to the exemption claimed under section 54E of the Act and under section 54E there is no provision like sub- section (4) which puts a condition precedent that if the sale proceeds is not appropriated for purchase of the new residential house before the due date of the filing of the return, the same be deposited in an account in any such bank or institution as may be specified in and utilised in accordance with any scheme notified by the Central Government, as such sections 54E and 54F or section 54, cannot be construed in the same manner. Similar is the position with regard to section 80C or 88 in which for claiming benefit under section 80C or 88 the assessee is required to make certain investment up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the same stands dismissed in limine with no order as to costs. 10. Facts of the case decided by hon. Mumbai high court and the case before us are not different. S. 54 provides that if an assessee has LTCG on transfer of a residential house and he purchases or constructs a residential house within the specified period then the amount appropriated towards the new house shall be deducted from the LTCG. In that case The assessee sold a house and used the sale proceeds to buy commercial property. Subsequently (but within the specified period) he borrowed funds and purchased a new house. The AO denied deduction u/s 54 on the ground that the new house had been purchased out of borrowed funds and not out of the consideration received for the old house. On appeal, the Tribunal [20 SOT 468] and High Court upheld the claim on the ground that section 54 of the act merely required the purchase of the new house to be within the specified period. The source of funds for the purchase was irrelevant. In para No 9 of the Order of Coordinate bench it is held in para no 9 which has been approved by Hon Bombay high court as under :- 9. Having heard the rival submissions and from careful ..... X X X X Extracts X X X X X X X X Extracts X X X X
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