Case Law Details
Amarnath Sarala Vs ITO (ITAT Bangalore)
ITAT Bangalore held that for claiming exemption under section 54F of the Income Tax Act, the assessee is required to furnish necessary evidence proving construction of the residential building within the period as enumerated in section 54F of the Act. As assessee failed to produce the same, exemption u/s 54F not available.
Facts- The assessee has sold one property for Rs.18,00,000/- vide deed of registration dated 22.11.2013 and another property for Rs.18,00,000/- vide deed of registration dated 28.11.2013. Thus, total sale consideration from the sale of two plots received by the assessee was Rs.36,00,000/-. The assessee declared Long Term Capital Gains (LTCG) of Rs.29,76,006/- after claiming indexed cost of acquisition of Rs.3,23,994/- and brokerage of Rs.4,00,000/-. The assessee claimed exemption u/s 54F of the amount of capital gains. She entered into an agreement with Mr. Raju for the purchase of a residential house at # 262, 8th Phase, J.P. Nagar, Bangalore vide. Subsequently, this agreement was cancelled and the assessee purchased 2 plots of land on 07.10.2016 for a total consideration of Rs. 26,00,000/- @ Rs.13,00,000/- for each plot. As the assessee did not construct house on the said plot, the AO disallowed exemption claimed u/s 54F.
Conclusion- We are not in a position to hold that the assessee is entitled for deduction u/s. 54F of the Act. It is needless to say that when the assessee claims deduction u/s. 54F of the Act, it is incumbent upon the assessee to place necessary evidence in support of its claim. In the present case in spite of the Assessing Officer and the CIT(A) requiring the assessee to furnish necessary evidence for construction of the residential building within the period as enumerated in section 54F of the Act, the assessee failed to produce the same. Being so, when we examine the facts on record to see whether the assessee herein has actually constructed any residential house within the meaning, object and time laid down u/s. 54F of the Act, the material on record does not suggest any construction of the house in terms of section 54F of the Act. The onus lies on the assessee to prove by way of evidence to justify their claim for deduction. In this case, the onus was not discharged by the assessee herein in view of the fact that the assessee could not furnish the requisite evidence to prove the fact that there was any actual construction within the time stipulated in section 54F of the Act. The assessee has not placed any cogent evidence, so that it can be inferred that actually there was construction of residential building out of the sale proceeds of the sale of land and also not placed evidence for the purchase of any materials relating to construction of residential building. Merely producing a copy of permission from Gram Panchayat with regard to construction permission that itself cannot discharge the assessee from proving actual construction.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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