Case Law Details
Sh. Vijay Sharma Vs ACIT (ITAT Delhi)
Objective of Section 54 is that the capital gains to be reinvested in another residential house. The provision emphasizes the investment of amount in new property within the timelines as per Section 54, but not completion of the property so as to be occupied or become habitable even. There may be many intervening factors which make it unreasonable and against the rules of prudence to expect the investor to also have completed the construction in three years. But then the law requires the gain to be statutorily invested.
Here in the case in hand total capital gain exemption was 1,62,76,703/- and which now has been restricted to the claim to the extent of investment of sum of Rs. 78,60,000/- in first property and the investments in two other properties have not been pressed for exemptions. Further, it is admitted case of assessee that income had accrued in FY 2014-15 and after the developer got approved zonal plan, the assessee obtained physical possession of the plot vide letter dated 18.08.2022 and though before that the assessee got approved the construction plan by making application with competent authority. However, construction has not begun. There is no evidence of any construction activity or of the fact that assessee has invested the proceeds in statutory deposits and then spent any proceeds of the sales consideration of two properties he had sold, into the construction over this plot. Thus the property in which part investments of capital gains was done continued to be plot for all purposes and intent, for the assessee in the period when construction was to atleast to be started, if not completed. That being so, there is no error in the determination of issue against the assessee by Ld. tax Authorities below and no merits in the grounds as raised here.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal has been filed by the Assessee against order dated 06.02.2020 in Appeal No. 10351/2018-19 assessment year 2015-16 passed by Commissioner of Income Tax (appeals), Faridabad (hereinafter referred to as the First Appellate Authority or in short ‘Ld. F.A.A.’) in regard to the appeal before it arising out of assessment order dated 27/12/2017 u/s 143(3) of the Income Tax Act, 1961 passed by ACIT, Circle-II, Faridabad (hereinafter referred to as the Assessing Officer or ‘AO’).
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