TMI Blog2012 (10) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred wholly and exclusively in connection with such transfer. The definition of net consideration does not refer that the consideration should be received in cash only. - benefit of exemption allowed - decided in favor of assessee. - IT Appeal No. 1147 of 2006 - - - Dated:- 16-8-2012 - K. Sreedhar Rao and B. Manohar, JJ. M. Thirumalesh for the Appellant. S. Parthasarathi for the Respondent. JUDGMENT B. Manohar, J. - The Revenue has filed this appeal challenging the order dated 17-04-2006 made in ITA No. 1473/Bang/2003 passed by the Income Tax Appellate Tribunal, Bangalore Bench-B dismissing the appeal and confirming the order dated 11-09-2003 passed by the Commissioner of Income Tax (Appeals), Bangalore ('CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Developer has to bear the entire cost of the construction of the multistoried apartment. As per the agreement, after construction of the apartment, six flats equivalent to Rs 45,00,000/- were to be given to the assessee. Out of six flats received as sale consideration, three flats were sold for the total sale consideration of Rs. 41,13,000/-retainmg the other three flats. Out of three flats, one is being used by the assessee for her self-occupation, another has been let out on a monthly rent of Rs. 10,000/- and the third flat was mortgaged for a lump sum consideration. In the returns filed by her, she claimed deduction under section 54EA of the Act. The Assessing Authority issued notice to the assessee. After hearing the representatives o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties from the sale consideration on the sale of flats amounts consideration received by the assessee on the sale of long-term capital asset i.e., the land owned by the assessee? 2. Whether the Assessing Officer was right in holding that the sale consideration invested in specified securities from sale of flats does not amount to consideration on transfer of long term capital asset as per the provisions of section 54EA of the Act? 3. Whether the Assessing Authorities were correct in holding that though the amount invested in the securities is from the sale consideration on sale of flats, the flats were transferred to the assessee on consideration for transfer of the long term capital asset i.e., land and the amounts invested in secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, hence, she is not eligible for such deduction. The judgment relied upon by the Appellate Tribunal is not applicable to the facts of the present case and sought for setting aside the same by allowing the appeal. 6. On the other hand, Sri. S. Parthasarathi, learned counsel appearing for the respondent-assessee argued in support of the order passed by the Appellate Tribunal and contended that as per the joint development agreement, the assessee has to transfer the land to the Developer for a sale consideration of Rs. 45,00,000/-. In lieu of cash, the Developer has agreed to give six flats. Accordingly, after construction of the apartment, six flats were handed over to the assessee for a sale consideration of Rs.45,00,000/-. It is virtual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied Securities and claimed deduction under section 54EA of the Act. The Assessing Authority held that the assessee has sold the land and received six flats in lieu of such land. Out of six flats three were sold. The long term capital gain has arisen on the sale of land. Therefore it cannot be said that the amount invested in the Specified Securities are qualified for deduction under section 54EA of the Act. 9. Section 54EA of the Act reads as under: 54EA. (1) Where the capital gain arises from the transfer of a long-term capital asset [before the 1st day of April, 2000] (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns" relating to long-term capital assets of the previous year in which the [specified securities] are transferred or converted (otherwise than by transfer) into money. Explanation - In a case where the original asset is transferred and the assessee invests the whole or any part of the net consideration is respect of the original asset in any [specified securities] and such assessee takes any loan or advance on the security of such [specified securities], he shall be deemed to have converted (otherwise than by transfer) such [specified securities] into money on the date on which such loan or advance is taken. (3) Where the cost of the [specified securities] has been taken into account for the purposes of clause (a) or clause (b) of sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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