Case Law Details
Shivratan Shrigopal Mundada Vs ACIT (ITAT Pune)
We do not find any relevance of the ‘completion of construction’ insofar as the exemption u/s.54F is concerned. What the section requires is that the assessee purchases a new residential house or “has within a period of three years, after the date constructed, one residential house in India.” This section simply talks of purchasing a house or constructing a house with the net consideration received from the transfer of old asset. It no where warrants the completion of construction within the stipulated period. If the amount required for exemption u/s.54F has been properly invested in the new house, the claim cannot be denied simply because the construction was not completed within the period of three years. As and when the target of investment of the eligible amount is achieved within a period of three years, the assessee earns exemption u/s.54F notwithstanding that he may continue to invest more on such new house beyond the given period. Since the law simply provides for investing the net consideration of the earlier transferred property as a sine qua non for claiming the exemption and not the completion of construction of the new residential house, such a condition cannot be read in the provision.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee is directed against the order dated 25-03-2019 passed by the Pr. Commissioner of Income-Tax-1, Aurangabad u/s.263 of the Income-tax Act, 1961 (hereinafter also called `the Act’) in relation to the assessment year 20 14-15.
2. Briefly stated, the facts of the case are that the assessee filed his return declaring total income of Rs.18,06,880/-. The assessment was completed u/s.143(3) on 29-12-2016 at the same income. The ld. PCIT noticed that the assessee sold a piece of land on 11-12- 2013 (Daregaon Land) for a consideration of Rs.1.30 crore, which had been purchased in the year 2004 for a sum of Rs.4,73,880/-. After indexation, the assessee had computed the long term capital gain of Rs.1,20,72,972/- and thereafter claimed exemption u/s.54F towards investment of Rs.1,42,05,400/- on construction of a new residential house. The ld. PCIT noticed that the assessee obtained the permission from Municipal Council, Jalna on 20-08-20 14 for commencement of construction on a plot which was purchased on 17-12-2013. It was thus opined that the AO wrongly allowed exemption u/s.54F because the assessee did not submit ‘Completion certificate’ towards construction of the new residential house during the course of assessment. It was still further noticed from the relevant certificate that the construction of new residential house was to be commenced on Plot No.28 only whereas the assessee included cost of Plot No.29 also for computing the cost of construction in claiming exemption u/s.54F of the Act. The ld. PCIT thus came to hold that the AO did not conduct any enquiry on this issue.
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