June 2019

Section 54 Investment, for purchase of new residential house, made up to date of filing of revised return of income qualifies for exemption u/s. 54

JAGDISH T. PUNJABI | DEVENDRA JAIN | TEJASWINI GHAG
Chartered Accountants

15

[2019] 104 taxmann.com 303 (Mum.)

Rajendra Pal Verma vs. ACIT

ITA No. 6814/Mum/2016

A.Y.: 2013-14

Dated: 12th March, 2019

 

Section 54 Investment, for purchase of new residential house, made up to date of filing of revised return of income qualifies for exemption u/s. 54

 

FACTS

The assessee e-filed his return of income for A.Y. 2013-14 on 31.03.2013. Thereafter, he revised his return on 15.11.2014. In the course of assessment proceedings, the A.O. observed that the assessee had sold a residential flat and had claimed the entire long term capital gain of Rs. 1.75 crores as exempt us. 54 of the Act.

 

The A.O. observed that the assessee entered into an agreement dated 29.12.2014 with the builder for the purchase of a new residential house. The agreement provided that the construction of the house would be completed by September, 2017. The A.O. also observed that the assessee had  neither invested the capital gains in the purchase of a new house, nor had he deposited the amount in a capital gains account as required by section 54(2). Accordingly, the A.O. disallowed the claim for exemption u/s. 54 of the Act.

 

Aggrieved, the assessee preferred an appeal before the CIT(A) who allowed the exemption to the extent of investment made for purchase of new residential house up to the due date of filing of the return of income as envisaged u/s. 139(1). He restricted the claim of exemption to Rs. 83.72 lakhs. Still aggrieved, the assessee preferred an appeal to the Tribun

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