Period prescribed u/s 54F of the Income Tax Act for purchase of a new house

IN THE INCOME TAX APPELLATE TRIBUNAL
“B’’ BENCH: BANGALORE

BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER
AND
SHRI B.R. BASKARAN, ACCOUNTANT MEMBER

 ITA No.1395/Bang/2019
 Assessment Year : 2012-13

Shri Rajappa Sreenivasa Murthy
Chandrashekara
921, Sobha Dew Flower, MG
Gardens
4th Cross, Sarakki Main Road
JP Nagar 1st Phase
Bengaluru
PAN NO : ACOPC5878L
APPELLANT 

Vs.

ACIT
Circle-5(3)(1)
Bangalore
RESPONDENT

Appellant by : Shri Ravishankar, A.R.
Respondent by : Shri Priyadarshi Mishra, D.R.

Date of Hearing : 16.06.2021
Date of Pronouncement : 18.06.2021

O R D E R

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

The assesse has filed this appeal challenging the order dated 29.3.2019 passed by Ld. CIT(A) 9 Bengaluru and it relates to the assessment year 2012-13. The assesse is aggrieved by the decision of Ld. CIT(A) in partially confirming the disallowance made by the A.O. u/s 54F of the Income-tax Act,1961 ['the Act' for short].

2. The facts relating to the issue are stated in brief. The assessee sold an ancestral property on 11.8.2011 for a consideration of Rs.1.05 crores and the same resulted in long term capital gain to the assessee. However, the assessee invested a sum of Rs.1.78 crores on purchase of a residential apartment from M/s. Shobha Developers. The above said amount was paid in instalments beginning from 30.3.2011. The details of payment are placed at pages 35-36 of the paper book. In view of the purchase of new flat, the assessee claimed the deduction u/s 54F of the Act against long term capital gain and accordingly returned nil income under the head long term capital gain. The A.O. noticed that the assessee has invested a sum of Rs.57.24 lakhs only in the new house before the due date for filing return of income for assessment year 2012-13. As per the provisions of sec.54F of the Act, if the sale consideration is not fully utilized in purchasing/construction a new house before the due date for filing return of income, then the unutilized amount should be deposited in Capital gains account scheme. In that case, the amount so deposited shall be deemed to be the investment for the purpose of deduction allowed u/s 54F of the Act. However, the assessee did not deposit unutilized amount in capital gain accounts scheme as required u/s 54F of the Act. Accordingly, the AO restricted the deduction u/s 54F of the Act to Rs.57.24 lakhs, being the amount actually invested in purchase of new flat. Accordingly, the AO computed the taxable amount of long term capital gain at Rs.41.87 lakhs. 

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