By K. B. Bhujle, Advocate
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CIT vs. Bharti Mishra; [2014] 41 taxmann.com 50 (Delhi):
The assessee, an individual, had sold shares and thereafter the sale proceeds of Rs. 54,86,965/- were invested in construction of house property. Exemption was claimed u/s. 54F of the Income Tax Act, 1961. The Assessing Officer rejected the claim on the ground that the construction of the house had commenced before the date of sale of shares. The Tribunal allowed the claim of the assessee.
On appeal by the Revenue, the Delhi High Court upheld the decision of the Tribunal and held as under:
“i) Section 54F(1) if read carefully states that the assessee being an individual or Hindu Undivided Family, who had earned capital gains from transfer of any long-term capital asset not being a residential house could claim benefit under the said section provided, any one of the following three conditions were satisfied; (i) the assessee had within a period of one year before the sale, purchased a residential house; (ii) within two years after the date of transfer of the original capital asset, purchased a residential house and (iii) within a period of three years after the date of sale of the original asset, constructed a residential house.
ii) For the satisfaction of the third condition, it is not stipulated or indicated in the section that the construction must begin after the date of sale of the original/old asset. There is no condition or reason for ambiguity and confusion which requires moderation or reading the words of the said s/s. in a different manner.
iii) Section 54F is a beneficial provision and is applicable to an assessee when the old capital asset is replaced by a new capital asset in form of a residential house. Once an assessee falls within the ambit of a beneficial provision, then the said provision should be liberally interpreted.
iv) In view of the aforesaid position, we do not find any merit in the present appeal and the same is dismissed.”
