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TMI Blog2020 (10) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... KA HIGH COURT] though the assessee has not deposited capital gains amount in the capital gains account scheme within the prescribed time, since the impugned expenditure was incurred within a period of 3 years from the date of sale of original asset, the assessee was entitled to proportionate deduction u/s 54F of the Act. Assessee has produced proof of payment to M/s. Mas Furniture who also had acknowledged the receipt of the amount and has stated that amount received from assessee was towards furnishing of apartment of the assessee in Sankalap Central Park. The stamp duty is part of the cost of the apartment and expenditure incurred for furnishing the apartment is a cost of improvement. We hold that assessee is entitled to proportion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for purpose of working out the deduction u/s 54F of the Act in pace of the balance estimated sum of ₹ 16,00,000/- claimed by the appellant in the return of income under the facts and in the circumstances of the appellant s case. 4. Without prejudice to the right to seek waiver with the Hon ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s 234A, 234B and 234C of the Act, which under the facts and in the circumstances of the appellant s case and the levy deserves to be cancelled. 5. For the above and other grounds that may be urged at the time hearing of the appeal, your appellant humbly prays that the appeal may be awarded costs in proceeding the appeal and also order for the refund of the instit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding was under way and . (ii) the said expenditure cannot be admitted u/s 54F considering it as the cost of construction of the house as the amount was not deposited in capital gains account scheme before the date of furnishing Return of Income under section 139 of the Act. 5. Aggrieved by the Assessment order in restricting the claim of deduction under section 54F of the Act, the assessee preferred an appeal before the first appellate authority. The CIT(A) confirmed the view taken by the AO. The relevant finding of the CIT(A) reads as follows: 4. During the course of appellate proceedings the AR of the appellant has put forth arguments that the sale proceeds were not deposited in capital gains scheme was only a techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e written submissions submitted before the CIT(A) and contended that none of the contentions raised before CIT(A) were considered and he had merely affirmed the order of the AO. It was submitted AO was not right in his observation that assessee had purchased an apartment and not constructed the apartment, hence due date was 2 years (i.e., 14.08.2016) and not 3 years from the date of sale of original asset. The learned AR submitted booking of a flat with a builder is a case of construction and not purchase of residential flat and therefore time limit period of 3 years is application. In this context, learned AR relied on judgment of the Hon ble Delhi High Court in the case of Smt. Bindra Kumar, reported in 253 ITR 343 . In so far as the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances, various judicial pronouncements have held it a case of construction of an apartment and not a case of purchase of apartment. Hence, it was held that the time period of 3 years is applicable. The Mumbai Tribunal in the case of Mr. Kishore H Galaiya Vs. ITO in ITA No.7326/Mum/2010 (order dated 13.6.2012) has held that booking of a flat with the builder is a case of construction and not purchase of residential flat and therefore, the time period 3 years is applicable. The Delhi Tribunal in the case of CIT Vs. R.L. Sood (2000) 108 Taxman 227 had held that a payment of substantial amount in terms of purchase agreement within 4 days of sale of his old house, assessee acquired substantial domain over the new residential flat within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction of a residential house within the period stipulated u/s 54F(1) of the Act, then section 54(4) of the Act is not attracted and therefore, the exemption u/s 54F of the Act cannot be denied on the ground that he did not deposit the said amount in the capital gains account scheme before the prescribed due date. A similar view was held in the judgement of the Hon ble Karnataka High Court in the case of Smt. Fatima Bai in ITA No.435/Bang/2004 (Judgement dated 17.10.2008) . In the instant case, assessee had expended ₹ 12,33,200/- in July, 2017 i.e. well within period of 3 years from the date of sale of original asset. Therefore, going by the dictum laid down by the Hon ble jurisdictional High Court in the case of K. Ramachandra Rao ..... X X X X Extracts X X X X X X X X Extracts X X X X
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