Vikas Narayan Baddi 2 Vs ACIT (ITAT Ahmedabad)
ITAT Ahmedabad held that denial of exemption u/s 54F of the Income Tax Act for a mere technical default, beyond the control of assessee, in not getting the new property registered within the stipulated time period of two years is unjustified.
Facts-
The solitary issue involved in the present appeal related to denial of claim of exemption of long term capital gain of Rs.1,08,69,338/- on account of investment of the same in a new residential house as per the provision of section 54F of the Act.
It was stated that the claim of the assessee was denied by the Revenue by holding that the assessee had failed to comply with the conditions stated therein of making investment in new residential house within the stipulated period of two years from the date of sale of original asset.
The assessee, on the other hand, has claimed that delay in investment was for reasons beyond his control and that too of a very short period of five months and intention of the assessee was to make investment of capital gain in new residential house, and therefore, it should be allowed the claim of the exemption under section 54F of the Act.
Conclusion-
Held that there is no iota of doubt that the delay in registration of the new property was for reasons beyond his control. Therefore, we are in complete agreement with the assessee that the denial of exemption u/s 54 F in the present case is for a mere technical default in not getting the new property registered in his name within the stipulated time period of two years, as specified under section 54F of the Act, the consequent delay being minor delay of 5 months that too for reasons beyond the control of the assessee. The intention of the assessee all along was to invest in the new property well within the stipulated time and the delay was for reasons beyond his control and was too immaterial.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
Present appeal has been filed by the assessee against order passed by the ld. Commissioner of Income-Tax(Appeals)-11, Ahmedabad [hereinafter referred to as “Ld.CIT(A)”] under section 250(6) of the Income Tax Act, 1961 (“the Act” for short) dated 18.12.2015 pertaining to the Asst.Year 2012-13.
2. At the outset itself, it was stated that solitary issue involved in the present appeal related to denial of claim of exemption of long term capital gain of Rs.1,08,69,338/- on account of investment of the same in a new residential house as per the provision of section 54F of the Act. It was stated that the claim of the assessee was denied by the Revenue by holding that the assessee had failed to comply with the conditions stated therein of making investment in new residential house within the stipulated period of two years from the date of sale of original asset. The assessee, on the other hand, has claimed that delay in investment was for reasons beyond his control and that too of a very short period of five months and intention of the assessee was to make investment of capital gain in new residential house, and therefore, it should be allowed the claim of the exemption under section 54F of the Act. The grounds raised before us, in this regard, are as under:
“1. The ld.CIT(A) has erred in law in making addition of long term capital gain of Rs.1,08,69,338/- u/s.54F of the Act on the erroneous ground that the assessee has utilised the amount of sales consideration deposited in capital gain account in purchase of the residential property after a period of 2 years.”
3. We have heard both the parties. The date line of events leading to earning of capital gain and denial of deduction under section 54F of the Act on the same were filed by the assessee before us by way of a detail as under:
