ACIT Vs Shri. Sunil Bandacharya Joshi (ITAT Bengaluru)
Undisputedly the assessee had invested in the villa as on 31.03.2011 by paying Rs.1,94,49,302/. However, the quarrel before us is that the amount is not directly invested in purchasing of the villa, rather it is routed through mutual funds. In the considered opinion of the bench what is required u/s.54F of the Act, is the following :
- That the capital gains must have arisen to the assessee from transfer of the long-term capital asset ;
- That the assessee within a period of one year before or two years after the date on which the transfer took place has purchased or has within a period of three years after the date had constructed one residential house in India.
- If the cost of the new asset is less than the net consideration received in respect of the original asset then the assessee is entitled to the proportionate exemption u/s.54F ;
- The amount of the net consideration which is not appropriated by the assessee towards the purchase of new assets made within one year before the date of transfer of the original asset took place or which is not utilised by the assessee for purchase or construction of the new asset shall be deposited by the assessee in any of the bank / institution as may be specified before furnishing the return of income, i.e.,the assessee is required to deposit the whole or part of the consideration unutilised in any of the scheduled bank /institution before furnishing the return of income and then only the assessee shall be entitled to the benefit u/s.54F of the Act.
In the present case, the capital asset was sold on 26.02.2011. The capital asset was purchased on 31.03.2011 and before the purchase of the capital asset the amount was deposited in mutual funds. Therefore in the considered opinion of the bench, before the date of filing of the return, not only the capital asset was purchased by the assessee on 31.03.2011, but also the assessee had deposited and invested an amount of Rs.15 lakhs with Canara Bank. Therefore the assessee has fulfilled all the conditions required u/s.54F for the purposes of claiming the exemption, in our view deposit of money by the assessee inter-alia in mutual fund prior to purchase of residential house albeit will not make any difference if the assessee had purchased the residential house within the time provided by the Act . Therefore in the considered opinion of the bench, appeal of the Revenue is devoid of merit and accordingly the same is dismissed.
