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2019 (3) TMI 476 - AT - Income TaxExemption u/s 54 - assessee could not obtain the possession and got the purchase deed executed within the period of three years - HELD THAT:- Assessee has made payment of for the purchase of flat to the developer. The fact of payment of the same and the transaction of purchase of flat are not in dispute. The only issue is that assessee could not obtain the possession and got the purchase deed executed within the period of three years. The delay was on account of developer and not on account of the assessee. As perused the paper book, where we find that there is a complaint filed by La Tropicana, Resident Welfare Association against the developer with National Consumer Disputes Redressal Commission. Thus, the fact that delay in obtaining possession and getting purchase deed executed was on account of the developer and was by reason beyond the control of the assessee. The assessee has made substantial payment of ₹ 62,68,311/-. In such peculiar facts and circumstances, we are inclined to agree with the contentions of the assessee that exemption under section 54 cannot be denied to the assessee. The assessee has done all what he could have done. There is no failure on the part of the assessee. We are of the considered opinion that CIT(A) was not justified in denying the exemption claimed by the assessee under section 54 and direct the assessing officer to delete this addition. Disallowance of exemption in respect of amount deposited by the assessee in the capital gain account on the ground that the same was not utilised within the period of three - HELD THAT:- The delay in the present case was on account of the developer and not on account of the assessee. The assessee had deposited the amount in capital gain account. The balance amount could not be utilised as there was a dispute and stay by the National Disputes Redressal Commisison. Accordingly, for the reasons stated hereinabove, we hold that the CIT(A) was not justified in confirming the action of the Assessing Officer and direct the AO to delete this. Even if the amount deposited by the assessee in the capital gain account scheme is to be charged to tax, then it could be taxed only after the expiry of the prescribed period not in the year to which the capital gain pertains to. The addition made by the AO and sustained by the CIT(A) deserves to be deleted. Expenses incurred by the assessee at the time of purchase of property - HELD THAT:- On going through the assessment order, we note that assessee failed to submit any evidence in respect of the expenses incurred at the time of purchase of the property. Before us also the AR has not produced any evidences. Therefore, in absence of any evidence on record, the claim of the assessee does not stand substantiated. We, therefore, support the addition made by the AO and sustained by the CIT(A). Finding no infirmity in the impugned order on this score, this issue is decided against the assessee Disallowance on account of cost of improvement - HELD THAT:- We find that the facts of this issue are identical to the issue of disallowance of cost of improvement dealt by us above wherein we have upheld the action of the Assessing Officer in ignoring the expenses in the absence of any evidence. Here also, in the absence of evidences, we hold that AO was correct in rejecting the claim of the assessee. The department is not supposed to make spot enquiry even when the assessee fails to adduce any evidence in support of its claim. Accordingly, this addition also deserves to be sustained.
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