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2018 (10) TMI 1750 - AT - Income TaxDeduction u/s. 54 - denial of claim as agreement for acquisition of property is unregistered agreement - whether CIT(A) erred in allowing the exemption on the ground that the construction of property was not complete nor its possession was received by the assessee within the mandatory period prescribed under the Act - HELD THAT:- As noted that there is no dispute with regard to the date of sale of old property. The only objection of the A.O was that the agreement for acquisition of new property dated 27/11/2011 is merely an unregistered agreement to purchase a property proposed to be constructed and that the said agreement cannot be constituted as a proof of purchase of property for claim of deduction u/s. 54. There is no agreement entered by the assessee with the developer before due date of filing of return. CIT(A) after considering the submission and evidences concluded that on the date of agreement of sale on 17/11/2011, the assessee has paid 85% of total cost of the said flat. The agreement could not be registered by appropriate authority as commencement certificate was not issued to the builder/developer. The developer vide its confirmation dated 07.12.2014 confirmed this receipt of consideration of ₹ 3.26 crores. Right in respect of property have been created in favour of the assessee. In ITO vs. Saroja Naidu [2016 (12) TMI 546 - ITAT CHENNAI] held that the assessee had made the investment for construction of flat by making payment to builder. The builder had defaulted due to which delay had occurred in construction of the flat within the time limit prescribed under the Act. The fault of the builder is beyond the control of the assessee whose intention was only bonafide to comply with the provisions of the Act for entitling the benefit of deduction under section 54 of the Act. - Decided against revenue.
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