KARANSINGH KACHRUSINGH KAKAS (HUF),,AURANGABAD vs. INCOME-TAX OFFICER,,

The assessee in ground No. 1 of appeal has also challenged the validity of reopening u/s. 147 of the Act. However, the ld. AR of assessee stated at the Bar the he would not be pressing ground No. 1 of appeal. Thus, the only issue to be adjudicated by the Tribunal is with respect to assessee’s eligibility to claim exemption u/s. 54B and 54F of the Act.

The brief facts of the case as emanating from records are : During the Financial Year 2008-09, the assessee (HUF) sold agricultural land comprising in Gat No. 15, Village-Golwadi admeasuring 3 Acre 20R vide Sale deed dated 01-12-2008 for a total consideration of Rs.1,01,00,000/-. The land sold was an ancestral property belonging to bigger HUF of Late Kacharusing Santramsing Kakas. After the sale of agricultural land the sale proceeds were invested for purchase of following properties : Particulars of Assets purchased Date of Purchase Consideration as per Deed Agriculture land Gat No. 41, 13-11-2009 Rs.50,00,000/- admeasuring 2 H 02R Agriculture land in Gat No. 12, 27-01-2010 Rs.20,00,000/- admeasuring 4 Acre Residential Plot No. 190, Golwadi 30-12-2010 Rs.10,12,000/- admeasuring 375 Sq. Mtr. Residential Flat admeasuring 70.14 11-08-2009 Rs.6,00,000/- Sq. Mtr. Residential Row House admeasuring 30-08-2010 Rs.11,00,000/- 73.03 Sq. Mtr.

Shri Pramod Shingte appearing on behalf of the assessee submitted that the assessee invested Capital Gains arising from sale of agricultural land for purchase of two parcels of agricultural land and residential properties. The assessee deposited part of Capital Gains in fixed deposits in the bank. In so far as the Capital Gain arising from sale of agricultural land is concerned, there is no dispute. The dispute is only with respect to exemption claimed u/s. 54B and 54F on investment of Capital Gain arising from sale of Capital asset. The ld. AR contended that the Assessing Officer has disallowed assessee’s claim of exemption u/s. 54B on the ground that the HUF is not eligible for claiming exemption and the investment for purchase of agricultural land is not made before due date of filing of return of income u/s. 139(1) of the Act. Admittedly, the assessee had not invested capital gains in designated Capital Gain Account Scheme but had deposited the amount in fixed deposit with bank. The assessee had not utilized the amount for any other purpose except for purchase of another capital asset at a later date.

On the other hand Shri Sanjeev Ghei representing the Department vehemently defended the impugned order. The ld. DR submitted that the assessee has failed to qualify the conditions as set out u/s. 54B and 54F for claiming exemption. Therefore, the exemption claimed by the assessee was rightly denied by the authorities below.

We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. In ground No. 1 of appeal the assessee has assailed the validity of reopening u/s. 147 of the Act. The ld. AR of assessee has stated at the Bar that he is not pressing ground No. 1. Thus, in view of statement made by ld. AR, the ground No. 1 of appeal is dismissed.

In ground No. 2 of appeal, the assessee has assailed disallowance of exemption u/s. 54B in respect of investment of Capital Gains in purchase of agricultural land. The provisions of Section 54B, as applicable to the assessment year 2009-10, the benefit of exemption was available only to

In ground No. 3 of appeal the assessee is assailed denial of exemption u/s. 54F on investment of Capital Gains in purchase of a residential house. To be eligible for claiming exemption u/s. 54F, the Capital Gains arising from transfer of Long Term Capital Asset (other than residential house), the assessee was required to purchase within a period of one year before or two years after the date of sale of capital asset. In the instant case, as per contentions of assessee, the assessee has entered into an agreement for purchase of residential house on 30-08-2010 and the house was purchased in October, 2010. We observe that the authorities below have rejected assessee’s claim of exemption u/s. 54F on the ground that the assessee has failed to make investment in purchase of a residential house within the statutory period. Ostensibly, the assessee had made investment in purchase of more than one residential property. However, the assessee is eligible for claim exemption u/s. 54F in respect of one residential house. We deem it appropriate to restore this issue back to the file of Assessing Officer to re-examine assessee’s claim of exemption u/s. 54F on the basis of documentary evidence and allow the benefit of exemption in respect of one house purchased by assessee within the period specified under the provisions of section 54F of the Act. Needless to say that the Assessing Officer while re-adjudicating this issue shall grant

In the result, the appeal of assessee is partly allowed for statistical purpose.