Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2024 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (5) TMI 699 - ITAT MUMBAILTCG - deduction u/s 54 - window available for the assessee being one year prior the date of sale of the property - Relevance of date of possession or date of agreement - deduction denied as date of possession of the new residential premises exceeded one year window - HELD THAT:- According to section 54 deduction is allowable if assessee purchases the property. In this case by agreement dated 25/07/2009, assessee ‘acquired right to purchase’ a house which was under construction, on 2/2/2011, when house was handed over to the assessee, when it was inhabitable , assessee purchased house. In Akshay sobti & ors. [2020 (1) TMI 407 - DELHI HIGH COURT] as held that the provision in question is a beneficial provision for assessee’s, who replace the original long-term capital asset with a new one - further held that booking of bare shell of a flat is a construction of house property and not purchase, therefore, the date of completion of construction is to be looked into which is as per provision of section 54 of the IT. Act. In this case also assessee has booked an under construction flat and same was handed over to the assessee on completion of construction. Further Coordinate bench in Bastimal K jain [2016 (6) TMI 1243 - ITAT MUMBAI] has also held that he assessee's claim of deduction under section 54 was to be reckoned from the date of handing over of the possession of the flat by the builder to the assessee i.e. 11-9-2009, and if one took that date, the assessee was entitled to deduction under section 54 because the assessee had sold his residential flat on 24-2-2010. All other decisions relied on by the assessee also held that date of possession of new property should be considered as the date of acquisition of the property. In the assessee’s own case while computing capital gain ld. AO has taken date of allotment as the date of acquisition of the property. Hence, we hold that assessee is entitled to deduction u/s 54 of the act on purchase of new property considering the date of possession , when it is completed, as the date of purchase of property as agreement to purchase the property was for under construction property. By entering into an Agreement to purchase assessee has acquired right to purchase the property and did not purchased the property as same was under construction. Section requires “Purchase” of property. Assessee appeal allowed.
|