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TMI Blog2020 (6) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... hat if the amount of capital gain is not utilised towards construction of residential house within a period of 3 years from the date of transfer of original asset, then, it will be charged to capital gain under section fortify of the Act in the year in which the period of 3 years from the date of transfer of the original asset expires. In the case of Vegesina Kamala [ 2016 (3) TMI 88 - ITAT VISAKHAPATNAM] the contention of the Commissioner of Income Tax that as per section 54F only unutilised portion of sale consideration is taxable in the previous year in which the period of 3 years expires from the date of sale of original asset, but the investment made in the vacant site has to be taxed in the year in which capital gain arose has exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration of ₹ 1.40 crores and derived the Long Term Capital Gain (LTCG) to the tune of ₹ 99,77,362/-. Under sale deed dated 13/7/2012 assessee purchased a residential plot for a consideration of ₹ 1,00,81, 000/- construction of a residential house. Assessee filed the return of income for the assessment year 2013-14 on 31/7/2013 declaring an income of ₹ 2,25,100/-after claiming the Long Term Capital Gain (LTCG) as exemption under section 54 of the Income Tax Act, 1961 (for short the Act ). Assessee could not construct the residential house till the expiry of the period of 3 years from the date of transfer of the old property in respect of which the exemption under section 54 of the Act was claimed and such period expi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transfer, the capital gains would be taxable as income only in the assessment year 2016-17, i.e. the year in which the period of 3 years from the date of transfer of old asset expires and the exemption claimed under section 54 of the Act in that year cannot be denied. She placed reliance on the decisions of the Tribunal in the case of Sri Prasad Nimmagadda v. DCIT [2013] 32 taxman.com 5 (Hyderabad-trib.) and Vegesina Kamala v. ITO [2016] 66 taxmann.com 280 (Visakhapatnam-Trib). 5. Per contra, submission of the Ld. DR is that if we accept the contention of the assessee, it would NU to the benefit of the assessee since the interest cost of the taxable capital gains would escape tax for 3 years. He further submitted that the proviso to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e within a period of 3 years from the date of transfer of original asset, then, it will be charged to capital gain under section fortify of the Act in the year in which the period of 3 years from the date of transfer of the original asset expires. 7. In that case also the assessee invested the long term capital gains on purchase of land towards construction of the house, which could not be constructed within the stipulated period of 3 years as the possession of the land could not be delivered by the developer and in such circumstances the assessee claimed exemption under section 54 of the Act could not be denied levy of proviso to section 54 of the Act. In such circumstances, the Tribunal held that the exemption claimed by the assessee u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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