Case Law Details
Court has held that no benefit under Section 54F of the Act could be given to the assessee, who had failed to fulfil the primary ingredients of proving either the constructions of a house or the purchase of a house. In fact there is not such a whisper that the construction had been started or that any portion at all had been built.
Relevant Extract of the Judgment
The facts of the case are that the assessee was having half share in his ancestral property situated at Bodla in District Agra admeasuring 3496 Sqm. The same was sold for Rs.88.00 lacs and in the year 2005-06 the assessee invested an amount of Rs.14,10,500/- for purchasing a plot of land for construction of a residential flat from M/s. Ansal Housing and Construction Ltd., New Delhi. This inter-alia, included the amount spent by the assessee towards external development charges of Rs.68,750/-. The assessee also spent an amount of Rs.125/- for seeking sanction of map for construction of the house from Agra Development Authority. The assessee, therefore, claimed for exemption, inter-alia, under Section 54F of the Income Tax Act as according to the assessee the capital gains from the sale of the ancestral land and due investment of the same for constructions of residential house is entitled for exemption under the said section. Accordingly, the assessee claimed deduction under the said section during the Assessment Year 2006-07.
The assessing officer, however, disallowed the said exemption claimed by the assessee in view of the fact that since the constructions were not done of the residential house and merely plot was purchased for construction of residential house, hence, the assessee is not entitled for claiming the aforesaid exemption under Section 54F of the Act. Against the aforesaid order the assessee filed an appeal before the Commissioner Income Tax (Appeals), who passed the order on 16.07.2009 and allowed the appeal of the assessee by reversing the order of the assessing officer on Section 54F of the Income Tax Act. In the said course Commissioner Income Tax (Appeals) relied upon the judgement of Hon’ble Madras High Court as well as upon CBDT Circular No.667 dated 18.10.1993.
Against the order dated 16.07.2009 the revenue filed an appeal before the Income Tax Appellate Tribunal giving rise to ITA No.428/Agra/2009. Income Tax Appellate Tribunal, Agra Bench, Agra who vide judgement and order dated 08.04.2011 has allowed the appeal filed by the revenue and has restored the order passed by the assessing officer.
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