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2024 (3) TMI 655 - AT - Income TaxCapital gain - Denial of benefit of 1st proviso to section 50C(1) which allows the consideration value fixed in the agreement to be considered instead of the stamp valuation for the computation of full value of consideration for transfer - Denial of benefit of exemption u/s 54B to assessee - submission of Ld. AR that the cheque received by assessee from buyer was ‘post-dated’ 09.10.2006 - HELD THAT:- Although the cheque was cleared on 11.10.2006, it could be treated as having been received on 09.10.2006. But it cannot be accepted as having been received on 29.09.2006. Had the assessee received on 29.09.2006, a ‘present-dated’ cheque and not ‘post-dated’ cheque and the same would be have been cleared in bank in 2-3 normal working days, there might have been strength in the argument that it should be treated as having been received on 29.09.2006 but this is not so in present case. AR has not quoted any decision holding that in a case where cheque itself is post-dated 09.10.2006 and cleared on 11.10.2006, the payment can be treated to have been received on 29.09.2006. In any case, we also agree with Ld. DR that if the stand taken by assessee/Ld. AR is accepted, it would give an unfettered leeway to persons to by-pass the requirement of 2nd proviso to section 50C(1) by applying a trick where a person can receive a post-dated cheque of any period and thereby mis-use the benefit of 1st proviso. We do understand that such a situation ought to be stopped. Therefore, we are not convinced by arguments of Ld. AR in this respect. In conclusion, we are not satisfied that the assessee has received any part of consideration through cheque on or before 29.09.2006 (date of agreement) and therefore we hold that the AO was right in not giving benefit of 1st proviso to section 50C(1) to assessee. The first grievance projected by assessee is therefore rejected. Benefit of exemption u/s 54B - whether the investment made by assessee after execution of sale-agreement but before registration of sale-deed, from the moneys received under sale-agreement, is eligible for exemption or not? - On a careful consideration, we find that the issue is settled in favour of assessee by the decisions quoted by Ld. AR as mentioned in foregoing paragraph. Therefore, we hardly need to delve this issue. We are inclined to carry the view taken in those judicial rulings and accordingly hold that the investment by assessee in the new land from sale-proceed of old land, even if made before registration of sale-deed, is eligible for exemption. Accordingly, we direct the AO to allow exemption. This grievance of assessee is accepted.
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