Case Law Details
CIT Vs Sardarmal Kothari (Madras High Court)
There is no dispute about the fact that the assessees have invested the entire net consideration of sale of capital asset in the land itself and subsequently the assessees have invested large sums of money in the construction of the house. The cost of investment in land and the cost of expenditure towards the construction of the houses is not in dispute. The one and only ground on which the Assessing Officer has non suited the assessees for the claim of exemption was that the houses have not been completed. There remains some more construction to be made.
The Tribunal has also taken note of its own earlier order in the case of Seetha Subramanain vs. Assistant Commissioner of Income Tax reported in 59 ITD 94, wherein the Tribunal has held that, in order to get the benefit under Section 54F, the assessee need not complete the construction of the house and occupy the same. It is enough if the assessee establish that the assessee had invested the entire net consideration within the stipulated period. The said view taken consistently by the Tribunal has been applied in these cases also. The Tribunal has distinguished the Delhi High Court Judgement in the case of D.P.Mehta vs. Commissioner of Income Tax reported in 251 ITD 259, relied on by the revenue in their favour to non suit the assessees for exemption. In our view the Tribunal has distinguished the same rightly because in the cited case, there was a factual finding by the authorities that the assessee himself has admitted that the construction put up was only a garage and service quarters and it was not fit enough for occupation of the assessee. That factual finding is totally absent in these cases. There is no material to entertain these appeals. The appeals fail and the same are dismissed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The relevant assessment year is 2001-2002. The assessees Shri Sardarmal Kothari and Shri Shanthilal Kothari, filed their respective return of income admitting a total income of Rs.3,02,593/- apart from the agricultural income of Rs.25,000/- each. The assessees have claimed exemption of capital gain tax under Section 54F of the Income Tax Act. The Assessing Officer rejected the same on the ground that the construction was not completed when he made a personal visit. Against that order, the assessees preferred appeals before the Commissioner of Income Tax (Appeals) who allowed the appeal by holding that the assessees have invested the capital gains in the land and substantially completed the construction and directed the Assessing Officer to grant the benefit to the assessees. Against that order, the department preferred appeals before the Income Tax Appellate Tribunal and the Tribunal has confirmed the order of the Commissioner and dismissed the appeals. The correctness of the said orders is now canvassed in these appeals by formulating the following questions of law:-
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