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2020 (9) TMI 574 - AT - Income TaxRevision u/s 263 - exemption u/s 54 - HELD THAT:- Development Agreement is crystal clear that the land has been transferred along with the house property and that it is also the responsibility of the developer to demolish the house property standing on the said property. These facts have been analyzed by the AO through notice u/s 142(1) and questionnaire and even the replies submitted by the assessee were placed on record. Only reasons for which CIT decided that the assessee is entitled to exemption u/s 54F and not u/s 54 because as per the Development Agreement, the term ‘owner’ appears therein referring to the assessee. Clauses of the Development Agreement where the entire transfer of house property along with the land given to the developer, these facts were not refuted by the DR. DR also could not place on record any evidence categorically showing that there was transfer of development rights only by the assessee. Exemption u/s 54 of the Act is correctly claimed by the assessee. Claim of exemption u/s 54EC - There is categorical finding of the Ld. CIT that for ₹ 50 lakhs, NHAI bonds invested were made in time, then why the assessee could not comply the law for other ₹ 17 lakhs which were invested also in NHAI bonds. Assessee could not explain anything in front of us at the time of hearing. We further find that the AO in his entire order has not discussed anything on this issue of investment of ₹ 17 lakhs in NHAI bonds by the assessee and whether they were according to the prescribed time limits as per section 54EC. AO has not given any reasoning or view in this matter. He has simply accepted the claim of the assessee granting exemption under the said provision. Assessee fairly conceded that there was a delay with regard to time limits prescribed in the statute for the said investment. When this issue has not been verified by the AO nor any independent enquiry conducted, nor any questions raised and when these facts are clear that in this issue the provisions of section 54EC has not been complied with by the assessee, the action of AO therefore, is erroneous and prejudicial to the interest of Revenue. CIT in his order passed u/s 263 is correct in holding that the assessee is not entitled for the claim of exemption u/s 54EC. Assessee is entitled for deduction u/s 54 since there is transfer of residential house property as observed hereinabove and for this part of the appeal, the assessee succeeds. Regarding the deduction claimed u/s 54EC assessee has not made the investment within stipulated time and this fact was also not examined by the Assessing Officer and the provisions of section 54EC were not satisfied by the assessee on this ground. The findings of Ld. CIT as per 263 order is sustained on this issue. Appeal of the assessee is partly allowed.
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