ACIT Vs M. Raghuraman (ITAT Chennai)
A bare reading of section 54 of the Act clearly says that in case the assessee purchased a residential house in India or constructed a residential house in India within the period stipulated in section 54(1) of the Act, the assessee is eligible for exemption under section 54 of the Act. Section 54(2) of the Act clearly says that in case the capital gain, which is not appropriated by the assessee towards purchase of new asset or which is not utilized in purchase of residential house or construction of residential house, then it shall be deposited in a specific account. In this case, it is not the case of Revenue that capital gain was not appropriated or it was not utilised. The fact is that the entire capital gain was paid to the developer of the flat. In other words, the assessee has utilised the entire capital gain by way of making payment to the developer of the flat.
Section 54(2) of the Act does not say that in case the assessee could not get the possession of the property, he is not entitled for exemption under section 54 of the Act. The requirement of section 54 of the Act is that the capital gain shall be utilised or appropriated as specified in section 54(2) of the Act. The assessee has complied with the conditions stipulated in section 54(2) of the Act, therefore, the Commissioner (Appeals) has rightly allowed the appeal of the assessee.
Comments are closed.