Case Law Details
Yatin Prakash Telang Vs ITO (ITAT Mumbai)
Facts: Assessee sold immovable property for INR 1.11 Crore on 4th Feb, 2012, LTCG on sale of property was INR 83,04,453. Assessee had purchased residential flat on 19th April, 2011 for INR 1.25 Crore, in which he had 70% share, therefore his part of investment was INR 91.20 Lakhs. Assessee invested INR 91.20 Lakhs, out of his saving bank account INR 24 Lakhs and bank loan of INR 67 Lakhs.
Assessee claimed exemption under section 54 for investment of new residential house. AO disallowed the claim contending that assessee has not utilized capital gain /sale consideration amount for purchase of new residential house.
Held: As per section 54, capital gain arising on transfer of house property is exempt if the assessee within a period of one year before or after the date of transfer purchases or within a period of 2 years construct house property for the purpose of his own residence.
In the case of K. C. Gopalan, Hon’ble HC has observed that the assessee has to construct / purchase a house property for his own residence in order to get the benefit of section 54. The wording of section itself would make it clear that the law does not insist that the sale consideration obtained by the assessee itself should be utilized for the purchase of house property.
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