R.MEENAKSHI,CHENNAI vs. ITO NCW (17) (2), CHENNAI

Shri B.Sagadevan, JCIT, represented on behalf of the Revenue and Shri N.Devanathan, Adv., represented on behalf of the assessee.

It was submitted by the Ld.AR that the assessee is an individual who is having salary income. It was a submission that the assessee is working :- 2 -: as a Nurse. It was a submission that during the relevant Assessment Year, the assessee had sold a property on 03.12.2008 at Vadapalani for a sale consideration of Rs.28.00 lakhs. It was a submission that she had purchased a vacant land at Kovvur on 03.11.2009 and had entered into for the construction of the residential house on 19.04.2010. It was a submission that the assessee had completed the construction of the residential house and had occupied the same. The Ld.AR drew my attention to Page No.40 of the Paper Book, which was a tax paid receipt in respect of the assessee new house for the for the Financial Year 2011-12. The Ld.AR drew my attention to the bank account of the assessee to show the payments made to Shri Varadharajan towards the cost of construction of her new house. The payments made to Shri Varadharajan are from 21.05.2010 to 21.03.2011. The Ld.AR further drew my attention to Page Nos.25 to 32 of the Paper Book, where the approximate value of the construction has been shown at Rs.16.63 lakhs. It was submitted by the Ld.AR that the AO and the Ld.CIT(A) denied the assessee the benefit of deduction u/s.54F on the ground that the sale consideration had not been deposited in the Capital Gains Account Scheme within the due date of filing of returns u/s.139(1). It was a submission that the assessee having constructed the new residential house, the assessee may be granted the benefit of deduction in view of the decision of the Hon’ble Madras High Court in the case of Sardarmal Kothari and Another reported in [2008] 302 ITR 286 (Mad), wherein, it has been held that if the assessee establishes the investment of the entire Capital Gains in the purchase of :- 3 -: the land within the stipulated period, the completion of the construction was immaterial and the assessee was entitled to the benefit of deduction u/s.54F of the Act.

In reply, the Ld.DR vehemently supported the order of the AO & the Ld.CIT(A). It was a submission that the assessee had not deposited the sale consideration in the Capital Gains Accounts Scheme before the due date of the filing of the return.

I have considered the rival submissions.

A perusal of the facts in the present case clearly shows that the assessee has sold her immovable property on 03.12.2008 for a sale consideration of Rs.28.00 lakhs and she has purchased a vacant land at Kovvur on 03.11.2009 for a consideration of Rs.6,01,000/- and also constructed a residential house, admittedly, for a total consideration of Rs.19.00 lakhs. The construction is also evidenced by the construction agreement and supported by the tax paid receipt for the FY 2011-12. This being so, I am of the view that in view of the principles laid down by the Hon’ble Madras High Court in the case of Sardarmal Kothari and Another referred to supra, the assessee is entitled to the benefit of deduction u/s.54F as claimed. Consequently, the AO is directed to grant the benefit of deduction u/s.54F. :- 4 -:

In the result, the appeal filed by the assessee is allowed.