| The Tax Publishers2020 TaxPub(DT) 2216 (Del-Trib) INCOME TAX ACT, 1961
Section 54F Section 45
Where capital gains had been utilized for construction of house at D-279, Defence Colony, New Delhi and as per the provisions of the Act, the assessee doesn't have more than one house which was chargeable to tax under the head “ income from house property” other than the one residential house owned on the date of sale of original asset, the addition made by the revenue authorities was therefore, unwarranted.
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Capital gain - Deduction under section 54F - On construction of house, one residential house already possessed by assessee -
Assessee had sold immovable property at Plot No. T-2/2, DLF, Phase-III, Gurgaon on 28-4-2011 and claimed deduction under section 54F on acount of construction of house at D-279, Defence Colony, New Delhi. The AO found from the submission of the assessee that the assessee had also purchased a residential flat at Rajendra Nagar on 7-9-2011 and since the assessee had already having another house as on completion of construction of D- 279, Defence Colony, New Delhi, the AO held that the assessee was not eligible under section 54F as the assessee had already purchased the residential flat at Rajendra Nagar out of the sale proceeds. The CIT(A) confirmed the order of the AO. Held: As on the date of transfer of the original asset on 28-4-2011, the assessee doesn' t own more than one residential house, The capital gains were not utilized for the Rajendra Nagar flat purchase on 13-9-2011, The capital gains had been duly deposited in the CG Savings A/c., The same amounts from the CG savings A/c had been utilized for the payment of various expenses incurred for the construction of house at D-279, Defence Colony, New Delhi which could be verified from the bank statement, The remaining expenditure incurred for the construction of the house had been met from the joint A/c maintained with Indusind Bank, The occupancy certificate reveals that the completion of the construction was within 2 years from the date of sale of the original asset (28-4-2011-1-2-2013). Thus, from the perusal of the facts, the revenue authorities have mislead themselves on holding that the purchase of the Rajendra Nagar flat out of the sale proceeds of the original asset was on the basis of wrong facts. Hence, keeping in view the facts of the case that capital gains had been utilized for construction of house at D-279, Defence Colony, New Delhi and as per the provisions of the Act, the assessee doesn' t have more than one house which was chargeable to tax under the head “ income from house property” other than the one residential house owned on the date of sale of original asset, the addition made by the revenue authorities was, therefore, unwarranted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
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