Case Law Details
Case Name : J.V. Krishna Rao Vs Deputy Commissioner of Income-tax, Circle 3(3), Hyderabad (ITAT Hyderabad)
Appeal Number : IT Appeal No. 1866 & 1867 (HYD.) OF 2011
Date of Judgement/Order : 15/06/2012
Related Assessment Year : 2008-09
Courts :
All ITAT ITAT Hyderabad
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IN THE ITAT HYDERABAD BENCH ‘A’
J.V. Krishna Rao
V/s.
Deputy Commissioner of Income-tax, Circle 3(3), Hyderabad
IT APPEAL NOs. 1866 & 1867 (HYD.) OF 2011
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I purchased a flat on May 31, 2013 for consideration 90 lacs using home loan amounting to 70 lacs. Subsequently I sold my old flat (held for more than 3 years) on Aug 15th, 2013 for sale consideration of 50 lacs
Considering the cost of acquisition and indexation it resulted in long term capital gain of 30 lacs. I used this LTCG of 30 lacs subsequently to do part payment of my home loan of 70 lac on 15th Oct 2013.
1. Will part pre-payment of 30 lacs towards home loan be considered as reinvestment of capital gain under section 54? I have a doubt because home loan could be interpreted as borrowed capital. So whether prepayment equal to capital gain (i.e. 30 lacs)will be considered as exemption under section 54?
2. Will all of 30 lac qualify for exemption?
2. Is my interpretation correct that only capital gain needs to be invested and not the sale proceeds (i.e. 50 lacs)
Thanks in advance!