Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 573 - AT - Income TaxCapital gain - Addition made with regard to sale of Madambakkam Land - Year of assessment - period of holding of asset - considering date of allotment or date of final sale deed executed for conveying the title - HELD THAT:- If you take sequence of events, it is undoubtedly clear that the assessee has acquired right over the above property in the year 1984 and is enjoying the title and interest. However, legal ownership has been finally came to the assessee through sale deed dated 06.01.2012. If you consider the date of allotment and subsequent documents, it can be clearly held that the assessee has acquired the property in the year 1984 and thus, if you consider said date, the period of holding of asset is more than 36 months and thus, profit from sale of asset is assessable under the head long term capital gains as claimed by the assessee. Therefore, we direct the AO to assess profit from sale of land under the head long term capital gains as claimed by the assessee, because various courts including case of CIT vs Ravindar Kumar Arora [2011 (9) TMI 343 - DELHI HIGH COURT] held that for the purpose of computing period of holding, date of allotment should be considered, but not the final sale deed executed for conveying the title and interest in the property. Hence, we direct the AO to compute long term capital gains as claimed by the assessee. Deduction claimed u/s. 54F - We find that the assessee has spent about Rs. 88,75,400/- towards construction of another residential house which includes purchase of land, payment for labour charges and payment to M/s. Raj Constructions for material supply. However, the contractors M/s. Chintu Constructions and M/s. Raj Constructions could not complete construction for various reasons. In the mean time, the assessee went out of India for official work and could not oversee construction work and only after she came back settled dispute with contractors and ultimately completed construction in the year 2009 and obtained necessary electricity connection to prove that the house property has been successfully completed. No doubt, the assessee could not complete construction of house within three years from the date of transfer of original asset. However, for any reason which is beyond control of the assessee, construction could not be completed and also assessee has spent entire amount of consideration received for transfer of original asset for acquiring new asset, then there is no reason for the AO to deny deduction u/s. 54F. Provisions of section 54F should be construed liberally as per various High Court decisions including case of CIT vs Sardarmal Kothari [2008 (6) TMI 15 - MADRAS HIGH COURT] and also Ravindar Kumar Arora [2011 (9) TMI 343 - DELHI HIGH COURT]. Thus we are of the considered view that, the AO has erred in denying deduction u/s. 54F of the Act and thus, we direct the AO to allow deduction as claimed by the assessee. Appeal filed by the assessee is allowed.
|