TMI Blog2005 (4) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in directing the Assessing Officer to allow the deduction under section 54 of the Income-tax Act on the investment of Rs. 11,47,500 made by the assessee in flat No. C-32, 6th floor, Thirthdham, Ahmedabad." 3. At the out set, it was mentioned by the ld. counsel for the assessee that the flat number mentioned in the ground of appeal as B-62 should be corrected as C-32 and the ld. DR has no objection thereto. Hence, the said flat number is corrected as C-32 and the appeal is considered in the light of the same. 4. Brief facts of the case are, that the assessee had sold a residential flat No. 4 in Vasant Vihar, 14th Khar Road, Mumbai-52, for a total con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer processed the return under section 143(1)( a ) and an adjustment of Rs. 11,47,500 was made. Aggrieved, assessee appealed to the CIT(A). 6. The ld. CIT(A) by his order dated 8-12-1998 deleted the addition made by the Assessing Officer on the ground that there was no case for prima facie adjustment. Further he observed that if at all the Assessing Officer wanted to verify the genuineness of claim of exemption under section 54, he could have either issued a deficiency letter under section 139(9) or notice under section 143(2) of the Act. Subsequently the case was selected for scrutiny and notices under sections 143(2) and 142(1) were issued to the assessee. Accordingly, the Assessing Officer processed the return unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the transaction has to be considered as purchase of the property and not as construction on the following grounds: ( i )There is no society and the builder is not a statutory authority like the DDA and hence the self-financing scheme will not apply. ( ii )the amounts paid by the assessee were not within a period of one year prior to the date of agreement dated 13-1-1997. The assessee had paid the first instalment on 5-1-1996 and second instalment on 12-1-1996 whereas she sold the residential flat on 13-1-1997, i.e., the entire amount was paid before the one year of sale of the residential flat in Mumbai. 9. The ld. counsel for the assessee submitted that the assessee was allotted flat No. B-62 for which she had paid Rs. 11,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchased or construction, as the case may be, the cost shall be nil ; or ( ii )if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitutions are to be considered in similar manner for the purpose of allowing exemption under section 54. The above circulars are binding on the revenue authorities under section 119 of the Act. Since the flat has been allotted to the assessee by the builder who would fall in the category of other institutions mentioned in the circulars, it has to be taken as a case of construction of the residential flat and not as a purchase of a residential flat. Having come to this conclusion that it is case of construction it is now to be seen if the assessee fulfils the conditions laid down under section 54(1) of the Act. The assessee was allotted flat No. B-62 and it was changed to C-32 vide letter dated 19-11-1999 and by letter dated 4-1-2000 the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
