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2019 (2) TMI 514 - AT - Income TaxDeduction u/s 54F denied - capital gain treated as STCG - assessee had sold flat during impugned AY which was held for a prescribed period of less than 3 years and therefore, the resultant gains were STCG in nature - Held that:- Upon due consideration, we find that this is undisputed fact that the assessee acquired the right in specific Flat No. 702, 7th Floor, Aerial View CHS Ltd. by way of allotment letter dated 22/10/2008, as placed on record. The sale consideration was fixed at ₹ 3.40 Crores which was already paid by the assessee on 29/09/2008 i.e. much before issuance of allotment letter. The agreement for allocation of flat was executed vide agreement dated 15/12/2011 which was registered on 13/04/2012. This agreement is in respect of the same flat which was allotted to the assessee vide allotment letter dated 22/10/2008 and the agreement also contains reference of the allotment letter. The perusal of these facts reveal that the property proposed to be acquired by the assessee was specific & a unique property which was clearly identified in the allotment letter dated 22/10/2008 for which the agreement was executed on 15/12/2011 which was in furtherance of the stated allotment only. AO, in our opinion, got misled by the fact that right in the flat got vested in the assessee upon allotment and the same got exchanged with actual flat upon execution of the agreement and therefore, the holding period should have been counted from the date of the agreement. Allotment as well as execution of the agreement did not vest two different capital assets in the hands of the assessee which got exchanged with each other upon execution of the agreement rather the event of allotment as well as execution of agreement was part & parcel of the same transaction and only an improvement in ownership rights held by the assessee in the flat. This being the case, no infirmity could be found in the impugned order and therefore, this ground stands dismissed. Having said so, the resultant gains earned by the assessee would be LTCG only and therefore, we proceed to delve into the issue of assessee’s eligibility to claim deduction u/s 54F. As further fortified by the observation of first appellate authority that amendment to Section 54F was applicable only with effect from 01/04/2015 wherein the word "a" was substituted with the word "one" which shows that prior to the amendment, the exemption was not restricted to investment made in one residential house. Lastly, the aforesaid deduction, merely on the basis of stated certificate of BMC, in our opinion, could not be denied to the assessee particularly when the corroborative evidences stood in assessee’s favor. Resultantly, the overall factual matrix leads us to concur with the stand of first appellate authority - Decided in favour of assessee.
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