By Jagdish D. Shah
Jagdish T. Punjabi
Chartered Accountants
ITO vs. Raj Kumar Parashar (Jaipur)
Members: Kul Bharat (J. M.) and Vikram Singh
Yadav (A. M.)
ITA No.: 11 / JP / 2016
AYs:
2011-12. Date of Order: 28th September, 2017
Counsel for Revenue / Assessee: Prithviraj Meena / Hemang Gargieya
FACTS
During the year under consideration, the
assessee had sold a property for a consideration of Rs. 24.6 lakh and deposited
the sale consideration in the capital gain account scheme for the purpose of
purchasing a new house property. The
entire capital gain earned by the assessee was claimed as exempt u/s. 54F. The
stamp authority adopted the
value of the property sold at Rs. 96.03 lakh. Applying the provisions of section 50C, the
AO held the assessee was required to invest / deposit the deemed sale
consideration of Rs. 96.03 lakh. Since the assessee had deposited Rs. 24.6 lakh
only, the AO computed capital gain
at Rs. 70 lakh
after allowing Rs. 24.6 lakh as deduction u/s. 54F.
On appeal, the CIT(A) referred to the
definition of ‘net consideration’ as given in Explanation to section 54F and
also relying on the decision of the Jaipur bench of Tribunal in the case of Gyanchand
Batra (ITA No. 9 / JP / 2010) dated 13.08.2010 held that the deeming
provision in section 50C would not be applicable to section 54F and
accordingly, allowed the appeal of the assessee.
Before the Tribunal, the revenue supported
the order of the AO and contended that the order of the CIT(A) was not in accordance with the express provisions of section 50C.
HELD
According to the Tribunal, as per the
provisions of section 54F, where the net consideration in respect of the
original asset is fully invested in the new asset, the whole of the capital
gains is exempt and no part of the consideration can be charged u/s. 45. The
Tribunal agreed with the CIT(A) that the consideration which is actually
received or accrued as a result of transfer has to be invested in the new
asset. In the instant case, since the
consideration which had accrued to the assessee as per the sale deed was
Rs.24.6 lakhs and the whole of the said consideration was invested in the
capital gains accounts scheme for purchase of the new house property, the
provisions of section 54F(1)(a) were complied with and the assesse was eligible
for deduction in respect of the whole of the capital gains computed u/s.
45.
