The Tax Publishers2021 TaxPub(DT) 0483 (Pune-Trib)

INCOME TAX ACT, 1961

Section 254

Where assessee has deposited capital gain in specified capital gains account scheme, assessee becomes entitled to exemption under section 54F for the year and in case the house was not so constructed or the other relevant conditions were not satisfied, then AO becomes free to charge the amount of exemption earlier allowed as income under section 45 of third year, therefore, miscellaneous application was allowed.

Appeal (Tribunal) - Rectification of mistake under section 254 - Eligibility of exemption under section 54F -

By means of the miscellaneous application, assessee pleaded modification of the direction given by Tribunal of order by which matter was restored for re-examination of the eligibility of exemption under section 54F. The short issue before Tribunal in order under section 254(1) was about the availability or otherwise of exemption under section 54F, which was allowed by CIT(A). It was recorded in order that assessee sold certain property and inter alia deposited balance capital gain in specified capital gains account scheme, for which exemption under section 54F was claimed. Thereafter, construction of residential house was an essential condition for availing exemption under section 54F for which no cogent material was placed on record by assessee for showing that a residential house was constructed on the said land within a period of 3 years from the sale of the original capital asset. Held: A categorical finding was recorded that assessee did deposit capital gain in specified capital gain account scheme. In that view of the matter, assessee becomes entitled to exemption under section 54F for the year. It was for AO to examine as to whether the assessee had constructed the house within period of three years or not. In case house was not so constructed or the other relevant conditions were not satisfied, then AO becomes free to charge the amount of exemption earlier allowed as income under section 45 of the third year.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :



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