Taxability of exemption claimed u/s 54/54f

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ravi (Querist)
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21 June 2012 I have a query in a case with regard to taxability of exemption claimed u/s 54/54F. Brief facts of the case are as follows:

01. The assessee has sold a open plot for Rs.1.50 crores in the FY 2008-09.
02. He has given advance for purchase of a residential property in Dubai directly from SB account of Rs.1 Crore.
03. He has deposited the balance amount of Rs.50 Lakhs in Capital Gain account before due date of filing of return. Accordingly he has claimed the entire deduction u/s 54F in the assessment year 2009-10.
04. He has failed to purchase the property with in a period of 2 years from the date of sale. Hence he has offered to tax entire deduction claimed u/s 54F in the assessment year 2011-12.

In the above case the following queries have been raised for which i need your valuable suggestion:
a) Whether the investment made in a foreign is elegible for exemption u/s 54/54F.
b) The year of taxability when the assessee failed to purchase the property with a period of 2 year. If the advance is given for a property in India, does it make any difference in the year of taxability.
c) If the year of taxability is the year of investment it self, how can the assessee revise his return of income when the time limit of revised return is over.
d) If the investment is routed through the capital gain account, does it make any difference in year of taxability when the assessee filed to purchase a house.

I have referred the following case laws in support of the assessee's calim but i could not get any case laws with regard to year of taxability:

1) Mrs.PREMA P.SHAH Vs INCOME TAX OFFICER (2006 101 TTJ (Mumbai) and (2006 100 ITD 60 Mumbai)
2) AMERICAN HOTEL & LODGING ASSOCIATION EDUCATIONAL INSTITUTE vs. CENTRAL BOARD OF DIRECT TAXES & ORS (2008 301 ITR 86)
3) Sri Sabir Salim Ahmed Vs The Income Tax Officer

I am requesting your good selves to give your valuable advice for the above issues.

Thanking you sir.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 June 2012 a) Yes ,as per decision reported in 100 ITD 60.
b) There can't be a change in the year of taxation based on the location of the investment.
c) Year of taxation is the year in which the period of 3 years ,from the date of transfer of original asset ,expires. Pl refer proviso to section 54F(4).
d) No.

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