Case Law Details
Kapil Kumar Agarwal Vs DCIT (ITAT Delhi)
Conclusion: Exemption under section 54F was allowable to assessee on purchase of a house property despite the fact that construction activities of the new house has started before the date of sale of the original asset as Section 54F was a beneficial provision and was applicable to an assessee when the old capital asset was replaced by a new capital asset in form of a residential house.
Held: Assessee derived a long-term capital gain on sale of shares and had claimed deduction under Section 54F stating that it had purchased an residential apartment. Admittedly, at the time of booking of the flat the construction did not commence. He was of the view that claim of the assessee that above transaction was a „purchase‟ of a new asset was incorrect and according to him the transaction of acquiring property as per the apartment buyers agreement was a transaction of „construction‟ of property and therefore he disallowed the claim. The issue arose for consideration was whether assessee was entitled to deduction u/s 54F despite the fact construction of the house property commenced before the date of the sale of the original asset. Following the decision in case of Bharti Mishra 265 CTR 374 (Del) & Kuldeep Singh 270 CTR 561 (Del)wherein it was held that Section 54F is a beneficial provision and is applicable to an assessee when the old capital asset is replaced by a new capital asset in form of a residential house. Once an assessee falls within the ambit of a beneficial provision, then the said provision should be liberally interpreted. It was held assessee had purchased a house property i.e. a new asset and was entitled to exemption u/s 54F despite the fact that construction activities of the purchase of the new house has started before the date of sale of the original asset which resulted into capital gain chargeable to tax in the hands of the assessee.
FULL TEXT OF THE ITAT JUDGMENT
1. This appeal is filed by the assessee, individual against the order of the Commissioner of Income Tax (Appeals) – 1, Gurgaon dated 20/2/2015 for assessment year 2011- 12 raising solitary ground of appeal that on the facts and circumstances of the case and in the law, the CIT –( A) has grossly erred in confirming disallowance on account of deduction as claimed by the assessee under section 54F of INR 7985761/–.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
