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2015 (6) TMI 720 - AT - Income TaxEntitlement to benefit of deduction u/s. 54F - long term capital gain on sale of shares invested towards purchase of a flat - allegation of the AO that it is only a lease and not a purchase - Assessing Officer denied the deduction on the ground that the assessee has made the claim under wrong provision and the correct provision is Section 54F - CIT(A) allowed claim of deduction u/s. 54F issue as raised in additional ground - Held that:- Hon'ble Bombay High Court in the case of Pruthvi Brokers and Shareholders P. Ltd. (2012 (7) TMI 158 - BOMBAY HIGH COURT ) has held that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities but is also entitled to raise additional claims before them. The appellate authorities have the discretion to permit such additional claims to be raised. The appellate authorities have jurisdiction to deal not merely with additional grounds, which became available on account of change of circumstances or law, but with additional grounds which were available when the return was filed. The words "could not have been raised" must be construed liberally and not strictly. There may be several factors justifying the raising of a new plea in an appeal and each case must be considered on its own facts. In the instant case the assessee has already made a claim although under the wrong head. Therefore, we do not find any infirmity in the order of the Ld. CIT(A) allowing the claim of deduction u/s. 54F. Assessee is not the absolute owner of the property since he is a lessee and the lease is for a period of 999 years, we find this issue also stands decided in favour of the assessee by the decision of the Mumbai Bench of the Tribunal in the case of Mrs. Prema P. Shah (2005 (11) TMI 182 - ITAT BOMBAY-J) wherein held that the lease is valid for a period of 150 years, which is in perpetuity and as such, the assessee is as good as absolute owner of the property. In the instant case the lease is for a period of 999 years subject to renewal for further period of 999 years. Further, as per clause 26 of the lease agreement, the assessee enjoys all the rights, i.e. transfer, mortgage, sub-lease etc. Therefore, it cannot be said that the assessee is not the owner of the property. Amount of deduction to be allowed u/s.54F - we find it is an admitted fact that the assessee has not deposited the sale proceeds in the specified bank account till 31-03-2009. The assessee only made payment of ₹ 55,40,625/- till 31-03-2009 towards purchase of flat. Since, in the instant case admittedly the assessee has made payment of ₹ 55,40,625/- till 31-03-2009 which is the due date of filing of return u/s. 139(4), therefore, following the decision Commissioner of Income-tax-II, Chandigarh Versus Ms. Jagriti Aggarwal (2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT) we hold that the assessee is entitled to claim deduction u/s.54F only to the extent of ₹ 55,40,625/- as against ₹ 100,03,125/- allowed by the Ld. CIT(A). As in the instant case the assessee has utilized a part of capital gain towards purchase of flat which is not in dispute. Therefore, we are of the considered opinion that the assessee is entitled to deduction u/s. 54F to the extent of ₹ 55,40,625/- only. - Decided partly in favour of Revenue.
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