The Tax Publishers2019 TaxPub(DT) 8303 (Del-Trib)

INCOME TAX ACT, 1961

Section 54

When the assessee had utilised entire amount of capital gain earned on sale of residential house property in purchase of another residential property on the land, whose possession was not available with him due to the reason beyond his control and due to the said reason only the construction on the said residential plot could not be started within the stipulated time, then the benefit of deduction under section 54 could not be denied to the assessee, as assessee was prevented by sufficient cause for not starting the construction.

Capital gains - Exemption under section 54 - Construction of residential plot not started within stipulated time - Reason beyond the control of assessee

Assessee had sold a residential house property and claimed exemption under section 54. AO disallowed said claim by contending that the construction could not be started within the stipulated time. Assessee contended that he had already invested entire sale proceeds before the due date of filing return for the purchase of another residential property on the land, whose possession was not available with him, due to the reason beyond his control. And, due to said reason the construction on the said residential plot could not be started. Thus, he was prevented by sufficient cause for not starting the construction. Hence, exemption under section 54 should be granted to him. Held: When the assessee had utilised entire amount of capital gain earned on sale of residential house property in purchase of another residential property on the land, whose possession was not available with him due to the reason beyond his control and due to the said reason only the construction on the said residential plot could not be started within the stipulated time, then the benefit of deduction under section 54 could not be denied to the assessee, as assessee was prevented by sufficient cause for not starting the construction.

REFERRED : Sanjeev Lal Etc. v. CIT & Anr. (2014) 365 ITR 389 (SC) : 2014 TaxPub(DT) 2721 (SC),Oxford University Press v. CIT (2001) 3 SCC 359 : 2001 TaxPub(DT) 1065 (SC),Abodh Borar v. ITO ITA No. 5114/Del/2016 : 2019 TaxPub(DT) 7663 (Del-Trib),Varun Seth v. ACIT, New Delhi (2019) 107 taxmann.com 133 (Delhi - Trib.) : 2019 TaxPub(DT) 4538 (Del-Trib)

FAVOUR : In assessee's favour

A.Y. : 2012-13

IN THE ITAT, DELHI BENCH

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