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TMI Blog2017 (11) TMI 1966X X X X Extracts X X X X X X X X Extracts X X X X ..... mmary manner. 2. The Commissioner of Income-tax (Appeals) went wrong in holding that exemption u/s 54 can be availed only in respect of the entire capital gains utilized within the time prescribed u/s 139(1) and not 139(4). 3. The Commissioner of Income-tax (Appeals) failed to note that the appellant acquired the flat within one year prior to the transfer and payments made over a period of time. 4. In any event, the Commissioner of Income-tax (Appeals) erred in not granting exemption u/s. 54F in respect of the payments made at least up to due date for filing the return of income u/s.139(1) of the Act. 3. The brief facts of the case are that the assessee along with other two co-owners had sold a vacant land on 03/02/2010 for a total con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd exemption of Rs. 19,74,569/-was claimed u/s 54F. The claim of the assessee was rejected by the AO on the ground that the assessee had failed to qualify the conditions as enumerator under subsection (1) and (4) of section 54F. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A). 3.1 On appeal, the Ld.CIT(A) endorsed the view of the ld. Assessing Officer in rejecting the claim of the assessee u/s 54F. For justifying the action of the AO, the Ld.CIT(A) observed that as stipulated u/s 54F, the assessee was required to file the relevant return of income within the due date or within the extended due date as belated return of income to claim the benefit of section 54F. However, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal asset which took place on 03/02/2010, the assessee was not eligible to claim the deduction of this amount of Rs. 4,78,286/- as well. Section 54F envisages that the new residential property should have been constructed within three years from section 54F, the amount of Rs. 4,78,286/-, which was utilised prior to the date of sale of original asset, cannot be considered for the deduction. 3.3 Therefore, Ld.CIT(A) arrived at a conclusion that the assessee was not eligible for deduction u/s 54F of the Act . Moreover, since the relevant provisions of section 54F are clear and unambiguous and the relevant Circulars and press releases, as discussed in the assessment order, also support the stand taken by the AO, the finding of the AO is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is having no merit. The income of assessee, if excluded the capital gain that the impugned amount of addition, is below the taxable income. Being so, the assessee is not liable to file her return u/s.139 of the Act. Since the assessee has invested the impugned amount in construction of a new residential house within the time is allowed u/s.139(4) of the Act, the assessee is entitled u/s.54F of the Act. This view of myself is fortified by the order of Co-ordinate Bench in the case of Rajalakshmi in ITA No.514/Mds./2017 dated 21.06.2017 wherein held that:- "4. We have heard both the.parties and perused the material on record and various case laws cited by both the parties. In our opinion, if the assessee' purchases new house within two year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reason that assessee used some fund other than consideration received on transfer of capital asset. Being so, on that reason deduction u/S.54 o e Act cannot be denied. Hence, we remit the entire issue in dispute with regard to Sec. 54 of the Act to the file of the ld. Assessing Officer with a direction to the ld. Assessing Officer to verify whether assessee has actually made investments in construction of new residential property, though it was not completed and deide thereupon." 4.2 In the present case there is no dispute regarding investment made by the assessee in a new residential house within the time allowed u/s.139(4) of the Act. In my opinion, there is no case to give direction to ld. Assessing Officer to examine the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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