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TMI Blog2019 (11) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... - as evidenced by an agreement of sale dated 03/01/1996. She sold this property to oneSmt. Jaspreet Kaur for a consideration of Rs. 1.23 crores under sale deed dated 29/4/2011. 4. Learned Assessing Officer observed that to claim the exemption under section 54F of the Income Tax Act, 1961 (for short "the Act"), the assessee had to invest the capital gains arising out of the sale of the long term capital asset within one year before or two years after the date of transfer, and/or in the construction of a residential house property within three years after the date of such transfer provided the house property purchasedor constructed, is not transferred within a period of three years from the date of acquisition. However, according to the assessee there was a tacit understanding between her and the purchaser of the property to the effect that the assessee will purchase back a portion of the house constructed on the original asset; that the basic structure of the house was ready within one year; thatthe assessee agreed to purchase the upper ground floor of the property for a consideration of Rs. 1.23crores with an understanding that the possession of the upper ground floor shall be han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered one and could be brought into existence to suit the convenience of the parties. For want of evidence, authorities below did not believe the version of the assessee that the capital gains arising out of the sale of original asset were invested well within time in purchase of the house property and thereby the assessee is entitled to claim exemptions under section 54F of the Act. 7. Aggrieved by the findings of the Ld. CIT(A), assessee preferred this appeal before us stating that the assessee had purchased the residential property within one year from the date of sale and therefore the authorities below were wrong in making the addition of Rs. 1,15,73,665/- and sustaining the same. It is the argument of the Ld. AR that when the investment was complete within the stipulated time, it is immaterial if the possession is taken at a later point of time. He placed reliance on the decision of the Hon'ble Karnataka High Court in the case of CIT vs. Smt. BS Shanthakumari (2015) 60 taxman.com 74 (Karnataka) for the principle that when it is established that there was investment of the entire net consideration in construction of a residential house within stipulated period, it would meet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. It could be seen from the impugned order, Ld. CIT(A) recorded that inasmuch as the sale deed dated 29.4.2011 clearly shows that on the sale of the residential plot, the assessee realised a sum of Rs. 1.23 crores and on account of such sale she realises the capital gain. However, such capital gain is not declared by the assessee by filing the return of income. 12. Assessee claims to have purchased the property of upper ground floor under the agreement of sale dated 30.3.2012 and for that matter, the sale deed dated 9.7.2015 also contains a recital to the effect that the entire consideration amount of Rs. 1.23 crores was already received by the vendors which the assessee had paid on 30.3.2012 by transfer of book entry. However, the assessee did not claim the exemption under section 54/54F of the Act on account of this investment in the house property by filing the return of income. When the assessee parted with the whole amount of Rs. 1.23 crores by way of investment into the house property, nothing prevented her from declaring the same in her return of income. 13. When a sum of Rs. 1.23 crores was paid by way of agreement of purchase, nothing prevented the parties from gettin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 54F of the Act. Reliance for this purpose is placed on the decision of the Hon'ble Karnataka High Court in the case of CIT vs. Smt. BS Shantakumari (2015) 60 taxman.com 74 (Karnataka). 18. In view of the facts narrated above, the dispute in this matter not taking possession of the land beyond 3 years as stipulated in section 54F of the Act, provided the purchase of property and/or investment of the amount within such stipulated period is proved. But the dispute relates to the question whether really the assessee invested the amount in purchase of the property before the expiry of the period prescribed under section 54F of the Act. Sale deed dated 29.4.2011 clearly establishes that the original property was sold for a consideration of Rs. 1.23 crores and such an amount was paid by way of cheques drawn on the Punjab National Bank, Shalimar Bagh, Delhias listed in the sale deed. This clearly does not spell out any intention of the vendors to purchase back any portion of the building that is to be constructed on such plot. 19. The sale deed dated 9.7.2015 is clearly beyond the period of 3 years from the date of sale of property since the period of 3 years expires by 29.4.2014. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm and also, she has not shown any income derived from the business or profession, if at all it has to be taken that Smt. Jaspreet Kaur carried on any business as a builder as claimed by the assessee. The statement of the assessee is not supported by her conduct.In this set of facts and circumstances, we are not inclined to believe the genuineness of the agreement to sell dated 30.3.2012. If this agreement is taken out of consideration, there is nothing on record to suggest that at any time prior to 9.7.2015, the assessee invested the amount for purchase of the residential house or that she had taken possession thereof within the time stipulated for the purpose of investment under law. 22. For these reasons, we are of the considered opinion that it is unsafe to place reliance on the agreement of sale dated 30.3.2012 to hold that as on such date there was a transaction of purchase of the entire ground floor of the property or that any amount was paid under such an instrument on that day, but only because the basic structure of the building was not complete as on the date, possession was taken subsequent to the expiry of the period of 3 years when the sale deed dated 9.7.2015 was e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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