2010 (7) TMI 1138 - AT - Income Tax

Summary

Issues involved:
The appeal concerns the entitlement of the assessee for exemption u/s 54 and 54F of the Income-tax Act, 1961 in relation to capital gains from the sale of a property at Poes Garden, Chennai, and land at Madambakkam.

Summary:

1. The Revenue contended that the assessee's agreement with the builder before the property sale disentitled the exemption claim u/s 54 or 54F. The Revenue objected to the application of Circular No.667 by the CIT(A).

2. The assessee sold a house at Poes Garden, Chennai, and land at Madambakkam, claiming exemption u/s 54 and 54F for investing in a house at Ranjit Road, Kotturpuram. The Assessing Officer rejected the claim, stating that construction started before the sale of properties.

3. The CIT(A) upheld the exemption claim based on the investment in the land at Ranjit Road, Kotturpuram, despite rejecting the agricultural nature of the land at Madambakkam.

4. The Departmental Representative argued that construction began before the sales, challenging the CIT(A)'s decision based on transaction dates.

5. The authorized representative emphasized that the land registration post-sale justified the exemption claim, citing relevant court decisions.

6. The Tribunal found the assessee eligible for exemption u/s 54 and 54F, noting the registration date of the land and the intention to purchase a flat rather than self-construction. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal.

In conclusion, the Tribunal upheld the assessee's entitlement to exemption u/s 54 and 54F, emphasizing the registration date of the land and the intention to purchase a flat rather than self-construct, in line with relevant court decisions and Circular No.667.