Itta/619/2014 Of The Commissioner Of Income Tax ( Central) v. Smt. G. Venkata Laxmi

HIGH COURT OF JUDICATURE AT HYDERABADFOR THE STATE OF TELANGANA AND THE STATE OF ANDHRAPRADESH PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.619 OF 2014 DATED:8.10.2014 Between: The Commissioner of Income Tax (Central)Hyderabad … Appellant And G. Venkata Laxmi … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.619 OF 2014 JUDGMENT:(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is sought to be preferred against a portion of theimpugned judgment and order of the learned Tribunal dated 4.5.2012in relation to assessment year 2007-2008, on the following suggestedquestion of law: (1)“Whether the ITAT was justified in directing the AssessingOfficer to allow deduction u/s. 54 of the Income Tax Actwhen the assessee had failed to construct her house withinthe stipulated period of three years?Officer to allow deduction u/s. 54 of the Income Tax Actwhen the assessee had failed to construct her house withinthe stipulated period of three years? (2)Whether the deduction u/s. 54 of the Income Tax Act can beallowed only on purchase of land without completion of theresidential house within the period of three years asstipulated in the Income Tax Act?allowed only on purchase of land without completion of theresidential house within the period of three years asstipulated in the Income Tax Act? (3)Whether the ITAT was justified in stating that the Board’sCircular No.667 dt.18.10.1993 did not stipulate that theconstruction would have to be completed to avail the benefitu/s. 54/ 54F of the Income Tax Act where in fact, the Circularis very clear that the acquisition of the plot and theconstruction thereon have to be completed within the periodspecified in Section 54/ 54F of the Act?”Circular No.667 dt.18.10.1993 did not stipulate that theconstruction would have to be completed to avail the benefitu/s. 54/ 54F of the Income Tax Act where in fact, the Circularis very clear that the acquisition of the plot and theconstruction thereon have to be completed within the periodspecified in Section 54/ 54F of the Act?” 2. In sum and substance, the Revenue has questioned allowing ofbenefit under Section 54 of the Income Tax Act, 1961 (hereinafterreferred to as ‘the Act’) 3. We have heard Sri J.V. Prasad, learned Counsel for theappellant – Revenue, and gone through the impugned judgment andorder of the learned Tribunal. 4. In this case, the assessee has sold a property and the sale proceeds were used for construction of a new building. In order to getbenefit of Section 54 of the Act, the investment of the sale proceedshave to be utilized by completing new construction of the buildingwithin three years of sale of property. The learned Tribunal on factfound as follows: “…Admittedly, in the present case, the assessee had invested theentire net consideration within the stipulated period and in fact has evenconstructed the major portion of residential property, as submitted by thelearned counsel for the assessee, except some finishing making it fit foroccupation. As the assessee has substantially completed all the work ofconstruction and has invested the entire net consideration, it has to beinferred that the assessee has complied with the conditions provided underSection 54 of the Act. In our considered view, as the assessee has acquiredsubstantial domain over new house and has made substantial paymenttowards cost of land and construction, within a period of specified underSection 54 of the Act, the assessee said to have complied with therequirements for claiming the exemption under Section 54 of the Act.” 5. In order to get the benefit of Section 54 of the Act, it does notappear that in case of purchase of the property with sale proceeds ithas to be reckoned within three years, in case of construction of newbuilding utilizing sale proceeds, the construction has to be completedwithin a period of three years of the sale. In this case, question ofregistration of document does not arise and it is a question ofinvestment in construction of the new building. When it was found onfact that construction was completed within three years of sale of theproperty, the benefit would automatically follows. We, therefore, do notfind any element of law in this appeal for consideration by this Courtand we do not want to complicate the issue by admitting the appeal.6. Hence, we dismiss the appeal. There will be no order as tocosts. ________________________ _______________________ SANJAY KUMAR, J