Satya Prakash Singh (HUF) v. The Income-tax Officer, Ward-50(2), New Delhi
[Citation -2016-LL-0921-88]

Citation 2016-LL-0921-88
Appellant Name Satya Prakash Singh (HUF)
Respondent Name The Income-tax Officer, Ward-50(2), New Delhi
Court ITAT-Delhi
Relevant Act Income-tax
Date of Order 21/09/2016
Assessment Year 2012-13
Judgment View Judgment
Keyword Tags long-term capital asset • hindu undivided family • immovable property • deemed income • capital gain • sale deed • new asset
Bot Summary: 54F of the Act i.e., one year before or two years after the date on which transfer took place or within a period of three years after the date of construction of residential house; the capital gain shall be charged u/s. 45 as income of the previous year in which the period of three years from the date of transfer of the original asset expires. The capital gain can only be charged in the assessment year in which the period of three years from the date of transfer of original asset expires and not in the year in which deduction is claimed. 45 as income of the previous year in which the period of three years from the date of transfer of original asset ITA No.4922/DEL/2015 Page 4 of 6 expires. For the sake of reference, the provisions of section 54F is extracted hereunder:- 54F. Subject to the provisions of sub-section, where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house, and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,. 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires, and not in the year in which the capital gain accrues. In these circumstances, I find force in the contention of the assessee, but the assessee has not placed any evidence on record to establish that he has offered the capital gain in that previous year in which the period of three years from the date of transfer of original asset expires.


IN INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH : SMC-II, NEW DELHI BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA No.4922/DEL/2015 Assessment year : 2012-13 Satya Prakash Singh (HUF), Vs. Income Tax Officer, 7/27, Mayadeep, Ward 50(2), Choudhary Deep Chand Marg, New Delhi. South Patel Nagar, New Delhi 110 008. PAN: AAFHS 4827L APPELLANT RESPONDENT Appellant by : Shri P.K. Mishra, CA Respondent by : Shri S.K. Jain, Sr. DR Date of hearing : 15.09.2016 Date of Pronouncement : 21.09.2016 ORDER This appeal is preferred by assessee against order dated 28.05.2015 of CIT(Appeals)-XVII, New Delhi inter alia on following grounds:- 1. That order of learned Commissioner of Income-tax (Appeals) is bad in law and on facts of case. 2 (a) That learned Commissioner of Income-tax (Appeals) has erred in sustaining disallowance of deduction u/s 54F of Income tax Act, 1961 in respect of investment of Rs.42,31,000/- for purchase of plot by appellant for construction of residential house. ITA No.4922/DEL/2015 Page 2 of 6 (b) Learned Commissioner of Income Tax (Appeal) erred in sustaining finding of Assessing Officer that investment in plot is not eligible for deduction u/s 54F of Income Tax Act, 1961. 4. above grounds of appeal are without prejudice to each other. 5. Appellant craves leave to add, alter, amend and/or modify above grounds of appeal. 2. issue in dispute in this appeal relates to assessment year in which deemed income in hands of assessee is to be taxed on account of withdrawal of deduction u/s. 54F of Act. 3. facts in brief borne out from record are that assessee has sold plot in Gurgaon for consideration of Rs.1,76,00,000 vide Sale Deed dated 03.08.2011. entire capital gain worked out has been claimed to be exempt u/s. 54F of Act, but subsequently assessee could not acquire residential house on account of delay in allotment of apartment by builder within prescribed period. 4. While completing assessment for AY 2012-13, Assessing Officer noticed these facts and disallowed claim of deduction u/s. 54F of Act and made addition thereof. assessee preferred appeal before CIT(Appeals), but did not find favour with him. 5. Now assessee is in appeal before Tribunal and reiterated its contentions. ld. counsel for assessee has placed reliance upon proviso to section 54F of Act with submission that in case ITA No.4922/DEL/2015 Page 3 of 6 assessee could not acquire residential house within period prescribed u/s. 54F of Act i.e., one year before or two years after date on which transfer took place or within period of three years after date of construction of residential house; capital gain shall be charged u/s. 45 as income of previous year in which period of three years from date of transfer of original asset expires. Therefore, capital gain can only be charged in assessment year in which period of three years from date of transfer of original asset expires and not in year in which deduction is claimed. 6. ld. DR placed reliance upon order of CIT(Appeals). 7. Having carefully examined orders of lower authorities in light of rival submissions, I find that main controversy revolves around issue as to in which year capital gain is to be charged u/s. 45 of Act. Whether it should be in previous year in which immovable property was sold out and capital gain accrues, or, in previous year in which period of three years from date of transfer of original asset expires. In this regard, I have carefully examined provisions of section 54F of Act and I find that proviso to sub-section (4) of section 54F clearly says that amount of capital gain arising from transfer of original asset shall be charged u/s. 45 as income of previous year in which period of three years from date of transfer of original asset ITA No.4922/DEL/2015 Page 4 of 6 expires. For sake of reference, provisions of section 54F is extracted hereunder:- 54F. (1) Subject to provisions of sub-section (4), where, in case of assessee being individual or Hindu undivided family, capital gain arises from transfer of any long-term capital asset, not being residential house (hereafter in this section referred to as original asset), and assessee has, within period of one year before or two years after date on which transfer took place purchased, or has within period of three years after that date constructed, residential house (hereafter in this section referred to as new asset), capital gain shall be dealt with in accordance with following provisions of this section, that is to say, . . (4) Provided that if amount deposited under this sub-section is not utilised wholly or partly for purchase or construction of new asset within period specified in sub-section (1), then, (i) amount by which (a) amount of capital gain arising from transfer of original asset not charged under section 45 on basis of cost of new asset as provided in clause (a) or, as case may be, clause (b) of sub-section (1), exceeds (b) amount that would not have been so charged had amount actually utilised by assessee for purchase or construction of new asset within period specified in sub-section (1) been cost of new asset, shall be charged under section 45 as income of previous year in which period of three years from date of transfer of original asset expires ; and (ii) assessee shall be entitled to withdraw unutilised amount in accordance with scheme aforesaid. ITA No.4922/DEL/2015 Page 5 of 6 8. From language of section, it is clear that capital gain is to be charged u/s. 45 as income of previous year in which period of three years from date of transfer of original asset expires, and not in year in which capital gain accrues. In these circumstances, I find force in contention of assessee, but assessee has not placed any evidence on record to establish that he has offered capital gain in that previous year in which period of three years from date of transfer of original asset expires. In absence of complete information, proper directions cannot be issued. I accordingly set aside order of CIT(Appeals) and restore matter to file of Assessing Officer with direction not to charge capital gain in impugned assessment year i.e. AY 2012-13, as it is to be charged in previous year in which period of three years from date of transfer of original asset expires and in this regard necessary verification be made by AO. If assessee has not offered capital gain chargeable to tax in that year, AO may reopen assessment and assess capital gain as income of that previous year. Accordingly, appeal of assessee stands allowed for statistical purposes. Pronounced in open court on this 21st day of September 2016. Sd/- (SUNIL KUMAR YADAV) Judicial Member New Delhi, Dated, 21st September, 2016. /D S/ ITA No.4922/DEL/2015 Page 6 of 6 Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, New Delhi. Assistant Registrar, ITAT, New Delhi. Satya Prakash Singh (HUF) v. Income-tax Officer, Ward-50(2), New Delhi
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