August 2019

Section 54 r.w.s. 139 Assessee would be entitled to claim exemption u/s 54 to extent of having invested capital gain on sale of old residential flat towards purchase of new residential property up to date of filing of his revised return of income u/s 139(5)

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

24.  [2019] 199 TTJ (Mum.) 873

Rajendra Pal Verma vs. ACIT

ITA No.: 6814/Mum/2016

A.Y.: 2013-14

Date of order: 12th March, 2019

 

Section 54 r.w.s. 139 Assessee would be entitled to claim exemption u/s 54 to extent of having invested capital gain on sale of old residential flat towards purchase of new residential property up to date of filing of his revised return of income u/s 139(5)

 

FACTS

The assessee had e-filed his return of income on 31st July, 2013. Thereafter, the assessee filed a revised return of income on 15th November, 2014. The AO observed that the assessee had during the year under consideration sold an old residential flat and the entire long-term capital gain (LTCG) on the sale of the old flat was claimed as exempt u/s 54. The assessee had purchased a new residential flat as per an agreement dated 29th December, 2014 with the builder / developer, as per which the construction of the property was expected to be completed by September, 2017. However, the AO observed that the assessee had failed to substantiate his claim of exemption u/s 54 amounting to Rs. 1.75 crores; hence he declined to allow the same.

 

Aggrieved by the order, the assessee preferred an appeal to the CIT(A). The CIT(A) was of the view that the assessee was entitled for claim of exemption u/s 54 only to the extent he had invested the LTCG up to the due date of filing of his return of income for the year under consideration, i.e., assessment year 2013-14 as envisaged u/s 139(1), therefore, he had restricted his claim for exemption up to the amount of Rs. 83.72 lakhs.

 

HELD

The Tribunal held that on a perusal of section 54(2), it emerges that the assessee in order to claim exemption u/s 54 remains under an obligation to appropriate the amount of the capital gain towards purchase of the new asset as per the stipulated conditions of section 54.Where the capital gain was not appropriated by the assessee towards purchase or construction of the residential property up to the date of filing of the return of income u/s 139, then in such a case the entitlement of the assessee to claim the exemption by making an investment towards purchase or construction of th

--->

Past Issues

Flip-Book
HTML View
Current Issue