Case Law Details
Sharada Mohan Shetty Vs ITO (ITAT Bangalore)
ITAT noticed that the assessee sold capital assets and claimed exemption u/s 54F of the Act. On perusal of the documents submitted by the assessee, we note that the assessee has furnished Construction plan approval letter, construction bills issued by SKS builders & initial construction photo at page 61 to 65. From the bills issued by builders, it was for construction of compound wall & shed works it clearly shows that the building was not completed within the stipulated period of 3 years from the date of sale of capital assets. We also noted from the documents submitted by the assessee that the landlord Smt. Chanamma filed writ petition before the Hon’ble High Court of Karnataka against the acquisition of land by the BDA. We further note from the order of the AO at para No.5 that the residential building has been constructed on the site No.197. The ld.AR of the assessee also filed case laws. On perusal of the above case law cited by the ld.AR of the assessee in the case of The ITO, Ward (1)(2)(2), Bangalore V/s Mujeeb Urrehaman, ITA No.1523/Bang/2019 ITAT “C” Bench, Bangalore Order Dated 31st August 2021, a similar issue has been decided by the coordinate bench of the Tribunal . In the case on hand, the assessee has invested the entire amounts before filing of the return of income as mandated in sec.54F of the Act & has claimed exemption u/s 54F of the Act. On perusal of the documents filed by the assessee we observed that the assessee had genuine reason for not constructing the building within the due date as prescribed by the section 54F of the Act, but the intention of the assessee was to construct of the residential house building.
The intention of the assessee was to invest the sale proceeds for acquiring/construction of the new assets. In the impugned case the assessee invested for the purchase of two BDA sites No. 196 & 197 for Rs. 1,86,00,858/-. The assessee also submitted that Rs. 22,50,000/- have been invested up to 17.08.2015 but no any credible evidences produced, the assessee has further submitted a photograph which is placed at page No. 65 of the paper book which will be used by the laborers during the construction period, in view of this the same construction cannot be considered as the assessee has constructed a house property at plot No. 197 as observed by the AO. Accordingly the assessee is eligible for the proportionate deduction as per section 54F of the Act, since the entire sale proceeds were not used for the new assets. Since the purchase of property from BDA is subjudice with the Hon’ble High Court of Karnataka and the assessee could not show us the status of the case before the Hon’ble High Court. If in case the assessee gets refund from the BDA, in such case the assessee will be liable for capital gain tax as per law.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee against the order passed by the NAFC, Delhi vide order dated 18/08/2022with the following grounds of appeal:-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
