Case Law Details
Case Name : Smt. Pushpa Devi Tirbrewala Vs Income Tax Officer (ITAT Hyderabad)
Appeal Number : ITA No. 1763/Hyd/11
Date of Judgement/Order : 22/03/2013
Related Assessment Year : 2007- 08
Courts :
All ITAT ITAT Hyderabad
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On a perusal of the orders of the Revenue authorities and other materials on record, the undisputed facts which emerge are the assessee received an amount of Rs.1,79,00,000 from sale of five flats. The assessee, though admitted long term capital gains, however, claimed exemption in respect of the same under S.54 of the Act, in respect of an amount of Rs.69,57,5000 towards purchases of plot for construction of residential house and an amount of Rs.64,05,000 being deposited in capital gains account scheme.
So far as the amount of Rs.64,05,000 deposited in capital gains account scheme is concerned, the Assessing Officer allowed the claim of exemption. However, in respect of the amount of Rs.69,51,500 utilized for purchase of plot, while the Assessing Officer disallowed it on the ground that the assessee has not purchased a residential house within one year, the CIT(A) has disallowed the claim of exemption by holding that the assessee has purchased the plot by utilizing fund from a different source and not out of the sale consideration received from the sale of flats. According to the CIT(A), for claiming exemption us. 54 of the Act, the assessee should have utilized the sale consideration received from sale of flats towards purchase of the plot. On going through the provisions contained in S.54 of the Act, we could not locate any such precondition/restriction. The only condition imposed under sub-section (1) and (2)of S.54 are- (a) the assessee should within a period of two years from the date of transfer, purchase a residential house or within a period of three years from the date of transfer, construct a residential house, and (b) the amount of capital gains not so utilized shall be kept in a scheme of the Central Government made in that behalf.11. It is not in dispute that the assessee has purchased a plot of land for Rs.69,51,500 and deposited an amount of Rs.64,05,000 in capital gains account scheme.
Exemption claimed by the assessee under S.54 of the Act cannot be denied on the ground that the assessee has not utilised the sale consideration received from the sale of flats itself, in purchasing the plot. Law is well settled by the judicial precedents that investment in purchase of pot for construction of house would entitle an assessee to claim exemption u/s.54 or 54F of the Act. Board’s circular No. 667 dated 18.10.1993 also says so.
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