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September 2024

It is not necessary that the consideration of the original asset be invested in new residential house. Construction of new house can commence before the date of transfer of original asset. Where return of income is filed under section 139(4), investment in new residential house till the date of filing of such return qualifies for deduction under section 54

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain & Aditya Bhatt, Advocates
Reading Time 5 mins

Jignesh Jaysukhlal Ghiya vs. DCIT

ITA No. 324/Ahd./2020 A.Y.: 2013-14

Date of Order: 7th August, 2024

Sections: 54, 139(4)

35. It is not necessary that the consideration of the original asset be invested in new residential house. Construction of new house can commence before the date of transfer of original asset. Where return of income is filed under section 139(4), investment in new residential house till the date of filing of such return qualifies for deduction under section 54.

FACTS

For the assessment year under consideration the assessee filed his return of income declaring total income of ₹31,71,420. The Assessing Officer (AO) assessed the total income by making an addition of ₹23,17,183 as long-term capital gains.

The assessee sold a residential house on 9th January, 2013 for a consideration of ₹45,00,000 and purchased an unfinished flat on 17th February, 2014 and sale consideration was paid between 4th August, 2011 to 8th December, 2011 (much before sale of original house). The assessee also entered into a Construction Agreement on 25th February, 2014 to comp

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