CA Sandeep Kanoi
Section 54F not available if construction of residential house takes place prior to date of transfer of long term capital asset
With respect to holding the Assessee to be not eligible for deduction u/s 54F, it is an undisputed fact and also noted by CIT(A) that the transfer with respect to 4 flats by means of registered sales deed took place in FY 2008-09 relevant to AY 2009-10. He has also given a finding that the building was constructed between 1.2.2007 and 23.10.2008 and the BU permission was granted by AMC on 23.10.2008 meaning thereby that no construction activity took place after 23.10.2008. For grant of deduction u/s 54F in case of construction of a residential house, the condition is that the assessee has within a period of three years after the date of transfer of long term asset, constructed a residential house. In the present case, since the construction took place prior to the date of transfer, we are of the view that CIT(A) has rightly appreciated the facts and by his well reasoned order held that Assessee is not eligible for deduction u/s 54F. Before us, the Ld. A.R. could not bring any decision of any High Court in support of his contention where it has been held that even the construction of residential house before the date of transfer would be eligible for deduction u/s 54F. Further, the case laws relied upon by the Ld. A.R. are distinguishable on facts.
In the case Smt. Tarulata Shyam & Ors. vs. CIT (1977) 108 ITR 345 (SC) the H’ble Apex Court has held that there is no scope for importing into the statute words which are not there. Such importation would be, not to construe, but to amend the statute. Even if there be a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation. The intention of the legislature is primarily to be gathered from the words used in the statute. Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be.
In view of the aforesaid ratio, we are of the view that the contention of the ld. A.R. that the provisions of section 54F being beneficial provision, cannot be accepted more so when the language of the section is very clear and since section 54F (1) states “has with a period of three years after that date constructed a residential house.” In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A) and thus dismiss this ground of Assessee.