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2014 (9) TMI 494 - AT - Income TaxComputation of STCG in reassessment proceedings – transactions for sale of land as well as the sale of super built up area - Denial of exemption u/s 54EC since investment made beyond 6 months – Held that:- As far as the sale of a property to M/s. Sumanth & Co. under the agreement dated 8.4.2004 is concerned, it was completed in the accounting year relevant to AY 2004-05, because the assessee has surrendered all its rights and entitlements in the undivided share of land to the extent of 43% in favour of the builder - CIT (A) has observed that as per clause iv(b) of the agreement, it was agreed between the parties that on surrender of any built up area, the owner would receive a sum of ₹ 2500/per sq. ft. - value of undivided interest in the land is also embedded - the land value in assessee's share would come to ₹ 60,31,394 - This value was meant for built up area of 5037 sft. He worked out the land value of per sq. ft. and then multiplied with surrendered area of 2278 sq. ft. - CIT (A) observed that the full value of consideration after debiting the value of land, the sale consideration accrued to the assessee is ₹ 29,67,283 - He debited the cost of acquisition of the land from this amount @ ₹ 903/- sft which was valued as cost of construction and in this way worked to ₹ 9,10,249/- is the STCG - The working made by the learned first appellate authority is scientific and based on logic - The rate adopted is the rate accrued between the builder and the assessee for surrender of the constructed area - the assessee cannot dispute that he has not received the amount as worked out by the CIT (A) - there is no error in the order of the CIT (A) in computing the STCG – Decided against assessee. The transactions for sale of land was completed in the accounting year relevant to assessment year 2005-06. The assessee has handed over the possession to the builder on 15.06.2004. The assessee itself has disclosed the LTCG in assessment year 2005-06. The investment in REC Board was not made in six months. It was made only on 27.7.2005 i.e. beyond the period of six months. Therefore, the learned CIT (A) has rightly observed that the assessee is not eligible for deduction u/s 54EC. - Decided against the assessee.
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