| COURT: | ITAT Mumbai |
| CORAM: | B. R. Baskaran (AM), Saktijit Dey (JM) |
| SECTION(S): | 54 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | construction of house, exemption, new residential house, purchase |
| COUNSEL: | Dr. K. Shivram, Rahul Hakani |
| DATE: | December 18, 2017 (Date of pronouncement) |
| DATE: | December 22, 2017 (Date of publication) |
| AY: | 2013-14 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 54: Acquisition of new flat in an apartment under construction should be considered as a case of “Construction” and not “Purchase”. The date of commencement of construction is not relevant for purpose of s. 54. The fact that the construction may have commenced prior to the date of transfer of the old asset is irrelevant. If the construction is completed within 3 years from the date of transfer, the exemption is available | |
For the purpose of sec. 54 of the Act, we have to see whether the assessee has completed the construction within three years from the date of transfer of old asset. In the instant case, there is no dispute that the assessee took possession of the new flat within three years from the date of sale of old residential flat. Accordingly, we are of the view that the assessee has complied with the time limit prescribed u/s 54 of the Act. Since the amount invested in the new flat prior to the due date for furnishing return of income was more than the amount of capital gain, the requirements of depositing any money under capital gains account scheme does not arise in the instant case. Further, the Hon’ble High Court has held in the case of ITO Vs. K.C.Gopalan (2000)(162 CTR 0566) that there is no requirement that the sale proceeds realised on sale of old residential house alone should be utilised
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