INCOME TAX ACT, 1961

Section 54F

Capital gains - Exemption under section 54F - Allegation that assessee had not complied with condition provided under section 54F for claiming exemption -

Assessee had invested a sum before due date of filing belated return and took the possession within three years from the date of transfer/sale of original asset. Assessee had not invested in Capital Gains Account Scheme before filing return under section 139(1) but complied with the conditions under section 54F(1) by purchasing and construction of residential property within three years from the date of transfer of original asset which was not disputed in assessment proceedings or in appellate proceedings. Provisions of section 54F are beneficial provisions and were to be considered liberally on the aspect of limitation period. Therefore, AO disallowed the exemption claimed by assessee. Held: Revenue stake involved in present case was much below the limit of rupees one crore for withdrawal of the appeal by Revenue. Since the present case involved some audit objection because of exemption in the said Circular, Revenue pressed the appeal on merits. Assessee had clearly satisfied the conditions for availing the benefit of exemption under section 54F as it had purchased new property and had taken the possession within the stipulated period of three years. Thus, appeal filed by Revenue was dismissed.

REFERRED : CIT v. V.R. Desai 2011 TaxPub(DT) 1074 (Ker-HC)

FAVOUR : In assessee's favour

A.Y. :

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