Section 54f

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 March 2014 I have sold a Long Term capital assets other than House property and after the date of sale I have purchased a new house property for which 40% payment was made from my own savings and balance through HBL. On the date of acquisition of new house property I do not hold any other House Property.

Whether payment made from HBL will also be treated as consideration for new house for the purpose of claiming the exemption U/Sec 54F of the I. T. Act, 1961?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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01 March 2014 it is not necessary that you have to invest the consideration received from the sale in the new house.

It is not relevant whether you have bought the new house using loan. it shall be considered for claiming exemption.

The relevant figures are consideration received from sale and total amount invested in the new house.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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02 March 2014 Mumbai tribunal has taken a contrary view that borrowed money can't be used for reinvestment u/s 54F.
Citation:- Milan Shred Ruparel Vs. ACIT [2009]20 DTR 289.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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02 March 2014 yes sir. similar disallowance have been made earlier in cases like Smt. Pramila A. Parikh in ITA No. 2755/Mum./1997.

But other benches even after Ruparel verdict have ruled in favor of assessee such as J.V. Krishna Rao V/s. Deputy Commissioner of Income-tax, Circle 3(3), Hyderabad IT APPEAL NOs. 1866 & 1867 (HYD.) OF 2011 [ASSESSMENT YEAR 2008-09]

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