Sec 54 F -HC's Liberal View - one more in the series >>>>

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SG

June 14

 Section 54/54F – Amount paid towards booking is to be treated towards ‘construction’

Section 54/54F – Amount paid towards booking is to be treated towards ‘construction’ - See more at: http://taxguru.in/company-law/key-effects-companies-act-2013.html#comment-958113

 

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7th June

CIT vs. Syed Ali Adil (Andhra Pradesh High Court)

S. 54/54F deduction allowable for purchase of multiple independent house units

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www.taxmann.com Thursday, May 23, 2013

Taxmann Daily

A Tax & Corporate Laws Daily

Sec. 54F benefit available on sum invested in construction of house nonetheless parts of investment may be from different sources and not from cap gains Where capital gain is assessed on notional basis under section 50C, whatever amount is invested in new residential house within prescribed period under section 54F would get benefit of deduction nonetheless parts of the investments may be from different sources and not from capital gains. full reinvestment made by assessee (i.e., 24 lakhs) in construction of residential house was to be allowed under section 54F - GOULI MAHADEVAPPA V. ITO [2013] 33 taxmann.com 47 (Karnataka) <previous

CIT vs. Jagtar Singh Chawla (P&H High Court)

April 2nd, 2013

(80.4 KiB, 157 DLs)

S. 54F: Deposit in capital gains account scheme by s. 139(4) due date sufficient

The assessee sold property on 20.06.2006 (AY 2007-08) for a consideration of Rs. 2.24 crores. The said amount was not invested in the capital gains account scheme by the due date of filing the return u/s 139(1) (31.07.2007) and was instead used to purchase a new residential house on 31.3.2008. The assessee claimed exemption u/s 54F which was denied by the AO & CIT(A) on the basis that u/s 54F(4) the amount of the consideration which is not appropriated for purchase of the new asset before the date of furnishing the return of income u/s 139 had to be deposited in the “capital gains account scheme” before the due date for filing the return of income u/s 139(1). On appeal by the assessee, the Tribunal allowed the claim. On appeal by the department to the High Court, HELD dismissing the appeal:

Though s. 54F(4) provides that the amount not appropriated towards purchase of the new asset has to be deposited in the capital gains account scheme before the due date for filing the return u/s 139(1), sub-section (4) of s. 139 is in the nature of a proviso to s. 139(1). S. 139(4) provides that a person who has not furnished a return within the time allowed to him under s. 139(1) may furnish the return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier. For AY 2007-08, the last date for filing the return u/s 139(4) is 31.3.2009. This extended time limit is available for making deposit in the capital gains account scheme. As the assessee had invested the consideration in purchase of a new house before that date, the exemption has to be allowed (Jagriti Aggarwal 339 ITR 610 (P&H), Rajesh Kumar Jalan 286 ITR 274 & Fathima Bai (Kar) followed)

KEY Note: Underlined be read closely; imlications are: (A) oncec paid and appropriated, no question of  making a deposit in a spl. bank a./c ; and (B) if so, can exemption be denied even if tghere be a delay in "purchase" within its letter and spirit. Also, should the delay be for no fault of assessee (see favourably decided cases)