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2021 (7) TMI 727

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..... of the I.T.Act is section 139 of the I.T.Act which also includes section 139(4) of the I.T.Act, which would be 31st March, 2016 in the given case. If the amount has been incurred before this date, 139(1) of the I.T.Act due date for depositing into CGAS scheme becomes applicable only when the amount has not been spent before the due date for filing return of income u/s 139(4). The words used in provisions of section 54F of the I.T.Act are `purchased or `constructed and the condition precedent for claiming benefit under such provision is the capital gain realized from sale of a long term capital asset should have been parted by the assessee and invested either in purchasing a residential house or in constructing a residential house. If the assessee has invested money in constructing the residential house, merely because the construction was not complete in all respects or such building is yet to be completed fully or the building not being in a fit condition for being occupied, would by itself not be a ground for the assessee to be denied the benefit u/s 54F Assessee would be entitled to the benefit u/s 54F of the I.T.Act once it is demonstrated that the consideration receive .....

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..... of the Assessing Officer in restricting the claim of exemption u/s 54F of the I.T.Act was that the balance amount was not deposited in capital gains account scheme within the due date of filing of the return of income u/s 139(1) of the I.T.Act. 4. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal to the first appellate authority. The CIT(A) held that the assessee was not able to prove that the house has been constructed within three years from the date of sale of original asset. It was further held by the CIT(A) that completion certificate issued by the builder, namely, Concorde Housing Corporation Private Limited showing the date of completion as 25.07.2015 did not prove the construction of the house is completed unless the same is issued by the local municipal authority. The CIT(A) further stated that the electricity bill for the property was not produced in the name of the assessee. Accordingly, the CIT(A) confirmed the addition of ₹ 92,10,629 made by the Assessing Officer by stating that the judgment of the Hon ble Karnataka High Court in the case of CIT v. K.Ramachandra Rao (supra) relied on by the assessee would not be applicable in th .....

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..... ne set comprising of case laws relied on, the other enclosing the submission submitted before the A.O. and CIT(A). The learned AR had also enclosed in the paper book the details of payments received for sale of original assets, the details of payment for purchase of new asset, the letter of Concorde Housing Private Limited vouching that villa was handed over to the assessee on 14.07.2015, the letter of builder stating that due to katha bifurcation, electricity connection could not be changed to assessee s name even after handing over of villa to assessee and electricity due were paid by builder on behalf of assessee, etc. 7. The learned Departmental Representative, strongly relied on the orders of the Income Tax Authorities. 8. We have heard rival submissions and perused the material on record. During the relevant assessment year 2014-2015, the assessee had sold plots measuring 71,685 sq.ft. for a sale consideration of ₹ 1,19,04,500 (plots were sold on 20.01.2014). The plots were acquired by the assessee for a sum of ₹ 80,000 on 29.09.1993. The assessee had declared in the return of income, the long term capital gains on account of sale of plots and claimed ex .....

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..... ost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the new consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45; Provided that nothing contained in this sub-section shall apply where (a) the assessee (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchase any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the 0original asset, is chargeable under the head Income from house property .....

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..... year before the date on which the transfer of the original asset took place, or (b) Not utilized by the assessee for purchase or construction of the new asset before the date of furnishing of return of income u/s 139 of the I.T.Act. 8.3 If above conditions are not satisfied, only then, such unutilized amount has to be deposited in CGAS before due date for filing return of income u/s 139 of the I.T.Act. Also, the section firstly referred in section 54F(4) of the I.T.Act is section 139 of the I.T.Act which also includes section 139(4) of the I.T.Act, which would be 31st March, 2016 in the given case. If the amount has been incurred before this date, 139(1) of the I.T.Act due date for depositing into CGAS scheme becomes applicable only when the amount has not been spent before the due date for filing return of income u/s 139(4) of the I.T.Act. In this context, we rely on the judgment of the Hon ble jurisdictional High Court in the case of CIT v. K.Ramachandra Rao (2015) 56 taxmann.com 163 (Karnataka). The Hon ble High Court was considering the following substantial question of law (2) When the assessee invests the entire sale consideration construction of a resident .....

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..... are not complete in all respect and as required under the law, that would not disentitle the assessee from the said benefit. The words used in provisions of section 54F of the I.T.Act are `purchased or `constructed and the condition precedent for claiming benefit under such provision is the capital gain realized from sale of a long term capital asset should have been parted by the assessee and invested either in purchasing a residential house or in constructing a residential house. If the assessee has invested money in constructing the residential house, merely because the construction was not complete in all respects or such building is yet to be completed fully or the building not being in a fit condition for being occupied, would by itself not be a ground for the assessee to be denied the benefit u/s 54F of the I.T.Act. In this context, we rely on the judgment of the Hon ble jurisdictional High Court in the case of CIT v. Smt.B.S.Shanthakumari [2015 (8) TMI 274], wherein the Hon ble High Court held that The words used in section 54F are `purchased or `constructed and held that the condition precedent for claiming benefit under such provision is the capital gain realized f .....

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