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2014 (6) TMI 364 - AT - Income TaxDeletion made u/s 54 of the Act - Investment in purchase of Jay Pee Greens flat – Application of capital gains towards purchase of flat – Essential criteria of purchase of property not actually taken place - Held that:- Following CIT Vs. R.L. Sood [1999 (9) TMI 27 - DELHI High Court] - where an assessee paid substantial amount in terms of purchase agreement for new residential flat within specified period it amounts to assessee’s compliance for requirement of sec. 54 - Merely because the builder failed to hand over possession within specified period, assessee could not be denied benefit of benevolent provision of sec. 54 - the applicability of CBDT Circular no. 471 dated 15-10-1986 is upheld - the circular finds further reinforcement by issue of CBDT Circular no. 672 dated 16-2-1993 - the assessee invested entire amount of capital gains towards purchase of new property remains unquestionable, thus, the exemption is clearly allowable – the investment in flat irrespective of the delivery of possession by builder has been held to be investment in purchase or construction of new flat – Decided against Revenue. Benefit of cost of improvement – Held that:- Following BB. Sarkar Versus Commissioner Of Income-Tax, West Bengal IV [1981 (5) TMI 21 - CALCUTTA High Court] - the investment incurred towards improvement of the new house purchased by the assessee to make it habitable would go towards amount invested for purchase of new asset – Decided against Revenue.
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