RAJEEV JAIN,MEERUT vs. ACIT CIRCLE-2, MEERUT

The present appeals have been filed by the assessee against the orders of the ld. CIT(A), Meerut dated 31.08.2015 and 19.11.2015.

The facts of the case in brief are that the assessee is a salaried person working in PSU Power Corporation Ltd. and derived income from salary, capital gains and income from other sources.

The assessee has sold a residential plot situated at Indirapuram for a consideration of Rs.90,00,000/- and shown Rajeev Jain capital gain of Rs.77,57,239/- and claimed deduction u/s 54F of the Income Tax Act, 1961 of Rs.66,37,503/- by making investment in house property amounting to Rs.76,28,144/-. The AO disallowed the deduction u/s 54F on the amount which the first owner paid to the builder disregarding the fact that the amount paid by the assessee includes the total value of the asset.

The ld. CIT(A) rightly deleted the addition made by the AO but at the same time held that out of the amount invested in the new property, an amount of Rs.20,00,000/- has been paid by the assessee from the loan taken from HDFC and hence the amount paid for acquisition of new asset out of the loan cannot be eligible for deduction u/s 54F. The ld. CIT(A) erred in holding that the same amount which was received by sale of property should be invested in acquisition of new property. In this case, the entire capital gains have been invested in the acquisition of new property. What is to be seen is, as to whether the “amount of capital gains” acquired by the assessee has been invested in the acquisition of new property or not but not whether the “same amount” is utilized or not. The ld. CIT(A) erred in viewing the issue myopically.

With regard to the disallowance of Rs.2,00,000/- which was invested in finishing work of the flat and an amount of Rs.3,00,000/- which was withdrawn from capital gains deposit account to meet the registration expenses of the new property was disallowed by the ld. CIT(A). On going through the details filed with regard to finishing work of the flat, the date of sale of old asset and date of purchase of new flat, we hold that the Rajeev Jain amount utilized is rightly eligible for deduction u/s 54F of the Act.

In the result, the appeal of the assessee is allowed.

Since, the matter has been adjudicated on merits in the which has been filed by the assessee involving the same issue is liable to be dismissed as infructuous.

In the result, the appeal in is allowed and the appeal in is dismissed. Order Pronounced in the Open Court on 30/12/2021.