TMI Blog2010 (1) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant Jacinta Zimik Vashai for the Respondent ORDER N.L. Kalra: The assessee has filed an appeal against the order of learned CIT(A), Mysore dated 26th March, 2009. 2. The grounds of appeal raised are as under:- i) The Hon'ble CIT(A) erred in holding that the assessee is not entitled to exemption u/s 54F of the I T Act in respect of the capital gain arising during the asst. year in question. ii) The Hon'ble CIT(A) erred in holding that in respect of the transactions of the assessee with Silver Oak Builders and Developers and Shobha Developers both are cases of construction and as the assessee had constructed two apartments within the period of three years, the provisions of sub clause (iii) to section 54F(1) are attracted without appreciating that the two transactions were materially different. iii) The Hon'ble CIT(A) completely overlooked that the registered sale deed executed on 6.11.2007 by Silver Oak Builders and Developers and the others of the land on the one side and the appellant on the other side was of the entire apartment itself on the said date which fell beyond one year of the sale of the original asset on 10.3.2006 and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming deduction u/s 54F. The assessee entered into sale agreement dated 16th May, 2006 for purchase of undivided 10% share in a residential site on which Silver Oak Apartment was constructed. The property was registered on 6th November, 2007. Before the learned CIT(A), it was submitted that the assessee was conveyed undivided interest in land as per deed dated 6th November, 2007. The possession of the apartment was given on 28th May, 2008. In respect of second new asset, the assessee filed copy of the construction agreement dated 24th June, 2006 for the flat and also filed copy of sale agreement dated 25th March, 2008. Before the learned CIT(A) it was submitted that Silver Oak flat was purchased on 28th May, 2008. Hence, the apartment in Silver Oak flat has been purchased after 10th March, 2008 and therefore, such property is not eligible for deduction u/s 54F. The learned CIT(A) after going through the sale agreement dated 16th May, 2006., observed that the property was constructed and not purchased. Accordingly, the learned CIT(A) held that Silver Oak Apartment has been constructed and therefore, the longer time limit of 10th March, 2009 will apply to it. Another new asset in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment flat no.302 on the second floor of the apartment building known as Silver Oak. Hence, from this absolute sale deed, it is clear that the assessee purchased an apartment along with undivided shares in the land for a sum of Rs.18,90,000/-. It is true that as per the sale agreement, the assessee was required to pay more than Rs.34,51,500/-. In view of the registered sale deed, we have to consider that the apartment in Silver Oak was purchased at Rs.18,90,000/- as on 6th November, 2007. As per clause 3 of the absolute deed in respect of Silver Oak Apartment, it is mentioned that the sellers and the confirming party have put the purchaser in actual possession of the said apartment at the time of execution of the sale deed. Clause 10 of the sale deed also mentioned that the purchaser has been made in actual possession of the said apartment and the purchaser can sale, transfer and convey the said apartment along with right to enjoy commission and restricted amenities and the possessor is absolute owner of the property in perpetuity and forever. Hence, it is clear that the appellant became purchaser of the apartment vide sale deed dated 6th November, 2007. The Silver Oak apartment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008. The Silver Oak Apartment has been purchased. The construction of apartment in Sobha Daisy has been done within the period of 3 years from the date of transfer of the asset on which the assessee was liable to pay capital gain. Thus, the apartment in Sobha Daisy will be a new asset on which the assessee will be entitled to deduction u/s 54F. The other apartment in Silver Oak had been purchased after the date of transfer of the original asset and therefore, that will not be covered under the proviso to section 54F. Deduction u/s 54F cannot be restricted on account of purchase of apartment in Silver Oak. The assessee will be entitled to deduction u/s 54F on apartment in Sobha Daisy by treating such apartment as new asset. 7. Proviso to section 54F(1) is applicable in case the assessee purchases residential house within a period of one year or constructs a residential house within a period of 3 years after the date of transfer of the original asset. Due to prohibition provided in section 54F(1), the capital gain allowed in the year of deduction u/s 54F is to be deemed to be income of the previous year in which residential house is purchased or constructed. This is clear from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of CIT vs Rajesh Kumar Jalan (2006) 286 ITR 274 has held that section 139 mentioned will not only include section 139(1) but will also include all sub-sections of section 139. In the instant case, it is not disputed that sale consideration has been utilized before the date of filing of the return u/s 139(4). The learned Gauhati High Court, while interpreting section 54(2) and holding section 139 mentioned therein will include all sub sections, have taken into account the judgments of the apex court relating to the principle of construction of statutes. It will be relevant to quote the following observations of the Gauhati High Court as mentioned at page 283: "The apex court in State of Maharashtra vs Santosh Shankar Acharya (2000) 7 SCC 463 held that it is too well known a principle of construction of statutes, that the Legislature engrafted every part of the statute for a purpose. The legislative intention is that every part of the statute should be given effect. The Legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the Legislature will not be accepted except for compelling reasons. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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