| Question And Answer | |
|---|---|
| Subject: | Section 54F |
| Category: | Income-Tax |
| Querist: | Rakesh Uniyal |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | capital gains account scheme, construction of new house, Reassessment, Section 54F deduction |
| Date: | February 25, 2022 |
Notice U/s 148 was issued on 03/03/2020 served upon the assessee. In this case, the assessee has sold an immovable property (residential land) of Rs. 70,00,000/- dated 15/05/2014 on which capital gain arose of Rs.51,46,000/-.
The assessee has deposited the entire amount of sale proceeds of Rs. 70,00,000/- in the Capital Gain Account Scheme, 1988 and claimed deduction u/s 54F of the Act.
The Assessee has purchased a semi-finished new residential house (which was not complete in all respect to be treated as ready to move property) on 30/03/2017 for Rs. 94,00,000/- by way of utilizing the amount of Rs. 70,00,000/- deposited in the Capital Gain Account Scheme, 1988.
The intention of the assessee was clear, the assessee has not utilized the amount kept the amount in the Capital Gain Account Scheme, 1988 for any other purpose and utilized the same for purchase cum completion of construction of the new residential house.
Further, the completion of the construction of the semi-finished house is done by the assessee herself.
In view of the above, the pure genuine intention of the assessee was to construct a residential house for his own residence and the amount deposited in the Capital Gain Account Scheme was utilized for the purpose of construction.
Sir do we have the case laws in support of the above. As the department is not giving the benefit of the above investment and made the additions.
Section 54F of the Income-tax Act, 1961 (Act) is a beneficial provision granting exemption to the assessee.
The Hon’ble Karnataka High Court in the case of CIT v. Smt. B.S. Shanthakumari 2015] 60 taxmann.com 74 (Karnataka)where assessee sold a property on 6-10-2008 and purchased another residential plot on 13-10-2008 and commenced construction, which was not completed within three years, and she claimed benefit of section 54F of the Act, once it was established by assessee that she had invested entire net consideration in construction of residential house within stipulated period, it would meet requirement of section 54F of the Act and she would be entitled to get benefit of section 54F of the Act.
good