TMI Blog2019 (7) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... Prakash Rakhra [ 2012 (10) TMI 286 - KARNATAKA HIGH COURT] as well as Gita Duggal [ 2013 (3) TMI 101 - DELHI HIGH COURT] and CIT vs. Smt. K.G. Rukminiamma 2010 (8) TMI 482 - KARNATAKA HIGH COURT] are apt in present case. By virtue of collaboration agreement, the assessee permanently lost the share beyond the 1st floor in the old residential property i.e. from 2nd floor onwards and in fact received the share up to the 1st floor in the newly constructed residential building. So the assessee permanently dis-possessed of 2nd floor onwards in old and new residential property. Thus, the assessee has rightly claimed exemption u/s 54. As per the provisions of Section 54, the assessee purchased residential property. The said property was held by the assessee for more than three years from the date of acquisition and it is a case of long term capital gain on transfer of residential property. The said residential property was subject matter of Collaboration Agreement dated 18.04.2012 under which the possession was transferred to the developer and the rights of the purchased property were lost. The consideration received by the assessee under Collaboration Agreement was ₹ 5.50 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating the fact that even the entire second floor and the entire third floor sold by the assessee to the buyer builder in the new construction along with the proportionate share in the common areas and the plot of land would not qualify as long-term capital asset within the meaning of section 54 of the Act. 5. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in allowing the claim of the assessee under the provisions of section 54 of the Act by completely overlooking that the case needed to be examined under the provisions of section 54F of the Act, as what was transferred was the proportionate right in the land, a long-term capital asset along with the right to malba , and the two newly constructed floors, which are short-term capital assets. 6. The appellant prays for leave to add, amend, modify or alter any grounds of appeal at the time of or before the hearing of the appeal. 3. The assessee is non-resident Indian and declared return of income in which a long term capital gain of ₹ 1,84,67,418/- was declared on a transfer of residential property bearing no. W-31, Greater Kailash- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture after demolition. The Ld. DR submitted that the malba of the demolished structure qualifies as a long-term capital asset and a residential house within the meaning of section 54 of the Act. The Ld. DR further submitted that the CIT(A) failed to appreciate the fact that even the entire second floor and the entire third floor sold by the assessee to the buyer builder in the new construction along with the proportionate share in the common areas and the plot of land would not qualify as long-term capital asset within the meaning of section 54 of the Act. The Ld. DR submitted that the CIT(A) has erred in allowing the claim of the assessee under the provisions of section 54 of the Act by completely overlooking that the case needed to be examined under the provisions of section 54F of the Act, as what was transferred was the proportionate right in the land, a long-term capital asset along with the right to malba , and the two newly constructed floors, which are short-term capital assets. 6. The Ld. AR submitted that the only dispute in the present appeal as relates to ground no. 1, 2 and 3 is whether the capital asset that was transferred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in old residential building as the builder got second floor and third floor in the new residential property, in exchange of basement, ground floor and first floor in the new residential building. By virtue of collaboration agreement, the assessee permanently loss the share beyond the 1st floor in the old residential property i.e. from 2nd floor onwards. And in fact received the share up to the 1st floor in the newly constructed residential building. So in real sense, the assessee was permanently and for all time dispossessed of 2nd floor onwards in old and new residential property. Thus, the assessee has rightly claimed exemption u/s 54. 7. We have heard both the parties and perused all the relevant material available on record. From the records it can be seen that it is an undisputed fact that the subject property was being used as residential house by the assessee from the period of its purchase on 09.08.2007 to the date of handing over its vacant possession to the builder for re-development and construction vide collaboration agreement dated 18.04.2012. From the Clause of collaboration agreement, it can be seen that what was transferred / handed over to the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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