Itta/291/2014 Of The Commissioner Of Income Tax-Iv v. Rajiv Talwar

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No.291 of 2014 DATED:24.4.2014 Between:Commissioner of Income Tax-IV,Hyderabad. And Rajiv Talwar,Secunderabad. … Appellant ….Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA ANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR Judgment:(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred against the judgment and order ofthe learned Tribunal dated 29.12.2010 in relation to theassessment year 2006-07 and is sought to be admitted on thefollowing suggested questions of law: 1.Whether on the facts and in the circumstances of the case theorder of the Tribunal is not perverse ?order of the Tribunal is not perverse ? 2.Whether on the facts and in the circumstances of the case, theTribunal is correct in law in directing the Assessing Officer to grantexemption of Rs.1,15,42,683/- under Section 54 of the Act ? We have heard Mr.J.V. Prasad, learned counsel for theappellant and gone through the impugned judgment and orderof the learned Tribunal. The learned Tribunal, on fact, found that the saleproceeds on account of transfer of assets have been utilizedwithin the period as mentioned in Sub-Section (1) of Section 54of the Income Tax Act, 1961 (for short ‘the Act’). Hence, the benefit of exemption claimed was allowed. We have seen Sub-Section (1) of Section 54 of the Act,which is set out herein: “Subject to the provisions of sub-section (2), where inthe case of an assessee being an individual or a Hinduundivided family, the capital gain arises from the transfer of along term capital asset being buildings or lands appurtenantthereto, and being a residential house, the income of whichis chargeable under the head “Income from house property”(hereafter in this section referred to as the original asset),and the assessee has within a period of one year before ortwo years after the date on which the transfer took placepurchased, or has within a period of three years after thatdate constructed, a residential house, then, instead of thecapital gain being charged to income tax as income of theprevious year in which the transfer took place, it shall bedealt with in accordance with the following provisions of thisSection, that is to say,___ (i) if the amount of the capital gain is greater than thecost of the residential house so purchased or constructedhereafter in this Section referred to as the new asset), thedifference between the amount of the capital gain and thecost of the new asset shall be charged under Section 45 asthe income of the previous year, and for the purpose ofcomputing in respect of the new asset any capital gainarising from its transfer within a period of three years of itspurchase or construction, as the case may be, the cost shallbe nil; or (ii) if the amount of the capital gain is equal to orless than the cost of the new asset, the capital gain shall notbe charged under Section 45; and for the purpose ofcomputing in respect of the new asset any capital gainarising from its transfer within a period of three years of itspurchase or construction, as the case may be, the cost shallbe reduced by the amount of capital gain. It appears that Section 54 requires that sale proceeds byway of capital gain have to be utilized within the periodmentioned therein. On fact, it was found correctly. Therefore, the learned Tribunal has correctly decided the matter. We, therefore, do not find any reason to interfere with theimpugned judgment and order of the learned Tribunal. Hence,the appeal is dismissed. Consequently, the miscellaneous applications, if anypending, shall also stand dismissed. No costs. __________________ K.J. SENGUPTA, CJ _________________ SANJAY KUMAR, J 24[th] April, 2014 PNB