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TMI Blog2021 (1) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... hin three years from the date of transfer of original asset and hence, we are inclined to uphold the findings of learned CIT(A) and reject grounds taken by the Revenue. Investment of balance sale consideration in capital gain account deposit scheme on or before due date for furnishing of return of income - The law is very clear as per which if an assessee invests full consideration from sale of original asset for purchasing or constructing another residential house, then assessee is entitled for 100% exemption from capital gain tax. In case, where assessee has invested part sale consideration for purchase or construction of another residential house, then proportionate deduction is allowed commensurate with investment made in new asset. In this case, on perusal of details filed by assessee, we find that assessee has made investment of ₹ 1,20,00,000/- in capital gain account deposit scheme on or before due date of furnishing of return of income and said deposit account has been utilized for construction of building within three years from the date of transfer of original asset. Assessing Officer has erred in rejecting the claim of assessee on the ground that assessee ough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ater connection were not given by the Block Development Officer (BDO) and also assessee has not paid any property tax as per the BDO letter dated 22/12/2017. 5) The Ld. CIT(A) ought to have considered the fact that during the assessment proceedings as well as remand proceedings assessee has failed to submit the construction agreement far verification of details of construction expenses, estimation made by the builder, completion certificate issued by the builder, electricity connection expenses, details of property tax paid etc. 6) For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the earned CIT(A) may be set aside and that of the Assessing Officer be restored. 3. Brief facts of the case are that assessee is an individual and director of M/s. Vastrakala Exports Pvt. Ltd. filed her return of income for assessment year 2015-16 on 31.08.2015 declaring total income of ₹ 87,79,550/-. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer noticed that assessee has claimed large deduction u/s. 54F of the Act and hence, called upon assessee to file necessary details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g aggrieved by the assessment order, assessee preferred an appeal before learned CIT(A). Before learned CIT(A), assessee has filed detailed written submissions along with certain additional evidences and argued that construction of building was completed in all respects and assessee has obtained electricity connection and also paid property tax on 03.03.2017. The assessee further claimed that even assuming for a moment building was not provided with electricity connection and water connection, but fact remains that it has furnished necessary evidences including bills, vouchers for procurement of materials and labour for construction of building and sanction letter from electricity board dated 20.04.217. The learned CIT(A) has forwarded additional evidences filed by assessee to the Assessing Officer for his comments. The Assessing Officer vide remand report dated 27.05.2019 has reiterated his observations made during the course of assessment proceedings and argued that assessee has failed to file any evidence to prove that building was completed on or before due date specified u/s. 54F of the Act. The assessee has also rebutted observations of the Assessing Officer insofar as invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes. It is quite possible that completion certificate from Local authority is not obtained. Local authorities do not issue timely completion certificates for various reasons Assessee cannot be held punishable for the same. On the contrary, the assessee has submitted competition certificates from contractors and engineers of the project. The assessee has been able to independently and verifiably establish that the capital gain amount is utilized towards construction of the property. The properly is constructed well before the deadline. In view of the facts and circumstances as above, I am of the opinion that the assessee has adduced sufficient evidence in support of her claim regarding completion of the residential house. The assessee is held eligible to claim deduction u/s. 54F. Assessing Officer is directed to allow the same. 6. The learned DR submitted that learned CIT(A) has erred in deleting disallowance of claim of exemption u/s. 54F of the Act without appreciating the fact that assessee has failed to comply with the condition mandated under the provisions of section 54F(4) of the Act to avail benefit of exemption u/s. 54F(1) of the Act. The DR further submitted that l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so not disputed fact that assessee has invested sum of ₹ 1,20,00,000/- in capital gains deposit account scheme on or before due date of furnishing return of income u/s. 139(1) of the Act. The only dispute made by Assessing Officer is with regard to completion of construction of building within three years from the date of transfer of original asset and investment of balance sale consideration in capital gains deposit account scheme. We have gone through observations made by Assessing Officer in light of various evidences filed by assessee before learned CIT(A) and found that learned CIT(A) has recorded categorical finding insofar as completion of construction of building on or before three years from the date of transfer of original asset. We further noted that assessee has placed all evidences including electricity connection obtained from concerned authorities in the month of April, 2017 and has also tax paid receipts for assessment of building for municipal taxes, which is also well before due date specified under the Act. The assessee has also placed various evidences including bills and vouchers for procurement of material and labour for construction of building. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed u/s. 54F of the Act and the amount of capital gain which was subjected to tax was not forthcoming from the orders of lower authorities. The assessee claims that it has claimed exemption u/s. 54F for ₹ 3,72,81,393/- and for balance capital gain she has paid tax, whereas Assessing Officer held that assessee has claimed exemption of ₹ 3,70,75,929/-. Therefore, we are of the considered view that for the limited purpose of ascertaining facts with regard to computation of capital gain from sale of shares and amount of sale consideration invested in purchase/construction of new asset and amount of capital gain included in return and payment of taxes, we set aside the issue to file of Assessing Officer and direct him to verify facts in light of claim of assessee that she had paid tax for balance amount of capital gains. In case, Assessing Officer found that assessee has paid tax on balance capital gain, then Assessing Officer is directed to delete additions made towards disallowance of exemption claimed u/s. 54F of the Act. 10. In the result, appeal filed by Revenue is treated as allowed for statistical purposes. Order pronounced in the open court on 18th January ..... X X X X Extracts X X X X X X X X Extracts X X X X
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