Case Law Details
Rajyalakshmi Reguraj Vs ITO (ITAT Bangalore)
The A.O. had restricted the claim of exemption u/s 54F of the I.T.Act for the reason that the assessee had utilized only the sale consideration of Rs.1,75,83,000 out of the balance sale consideration of Rs.1,90,00,000 (Rs.2,40,00,000 – Rs.50,00,000) for the construction of a residential house. Accordingly, proportionately exemption u/s 54F of the I.T.Act was allowed amounting to Rs.1,43,80,289 instead of Rs.1,55,39,185 claimed by the assessee. The builder in its letter dated 29.11.2019 had stated that there are payments by the assessee amounting to Rs.4,17,000 which were not included in the reply submitted to the A.O. pursuant to the notice issued to the builder u/s 133(6) of the I.T.Act. The A.R further submitted that the registration of the property was undertaken, which cost the assessee an amount of Rs.10,00,000 apart from the total consideration of Rs.1,80,34,321 mentioned by the builder. It was also stated that the assessee has further paid a sum of Rs.33,26,923.
8.1 In the light of the judgments of the Hon’ble jurisdictional High Court in the cases of CIT v. Sri.K.Ramachandra Rao in ITA No.46 and 47 of 2014 and 494 and 495/2013 (judgment dated 14th July, 2014) and CIT & Anr. v. Sambandam Udaykumar [(2012) 345 ITR 389 (Kar.)], it is clear that the assessee would be entitled to exemption u/s 54F of the I.T.Act with regard to utilization of sale proceeds for the purpose of construction of a residential property within a period of three years from the date of sale of old asset.
In the instant case there is no clarity as regards the date of utilization of the amounts apart from Rs.1,75,83,000. It is also not clear when the assessee had incurred the expenditure of Rs.10 lakh for registration of the property. In the light of these facts, I am of the view that the matter needs to be examined by the Assessing Officer. The assessee shall be entitled to exemption u/s 54F of the I.T.Act with regard to utilization of the sale proceeds which are within three years from the date of sale of original asset, in the light of the dictum laid down by the above judicial pronouncements. It is ordered accordingly.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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