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2015 (3) TMI 1014 - ITAT PUNE

2015 (3) TMI 1014 - ITAT PUNE - TMI - Exemption u/s 54F - CIT(A) allowed the claim - Plea raised by the the Revenue was that the money was paid earlier i.e. prior to the window year allowed under section 54F of the Act - Held that:- In addition to the reasons for acquisition of two independent 9 flats being one flat, the next contention of the assessee was vis--vis the date of purchase of the property and it was admitted by the assessee that the agreements for purchase of flats though were exec .....

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was received from the Assessing Officer. In the remand report, the Assessing Officer mentioned that the occupancy certificate issued by PMC confirms the fact that the construction was completed and building was ready for occupation during the previous year relevant to assessment year 2008-09. Similarly, in respect of electricity bill, the verification carried out by the Assessing Officer reflected that the bill was issued during the previous year relevant to assessment year 2008-09. Another evi .....

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d on 19.11.2004.In view of the above said facts and circumstances and evidences filed by the assessee before the CIT(A), we confirm the observation of CIT(A) in this regard that the assessee had purchased the said flats in instant assessment years under appeal.

The next aspect of the issue was the purchase of two separate flats vide two separate sale deeds. In the facts of the case, the assessee had purchased two flats which were joined by the assessee and had a common entrance and a .....

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- Shri G.S. Pannu And Ms Sushma Chowla JJ For the Appellant : Shri Rajesh Damor For the Respondent : Shri Sunil Ganoo ORDER Per Sushma Chowla, JM: Both the appeals filed by the Revenue are against separate orders of CIT(A)-III, Pune, dated 30.08.2013 relating to assessment year 2008-09 against respective orders passed under section 143(3) of the Income Tax Act, 1961. 2. Both the appeals relating to the connected assessees on similar issue were heard together and are being disposed of by this con .....

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ssee had not followed the restricted framed u/s 54F. 3. For these and such above other grounds as may be urged at the time of the hearing, the order of the learned CIT(Appeals) may be vacated and that of the Assessing Officer be restored. 4. The appellant craves, leave to add, amend, alter or delete any of the above ground of appeal "'during the course of the appellant proceedings before the ITAT. 4. The brief facts of the case are that, during the year under consideration the assessee .....

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is brother Shri C.A. Dhere sold the plot at Fursungi vide agreement to sell dated 12.04.2007 for a total consideration of ₹ 1,39,20,000/-. The assessee s share in the said consideration was 50% at ₹ 69,60,000/-. The cost of acquisition of the said plot as on 01.04.1981 was shown at ₹ 9,00,000/- and cost of improvement to the said plot during the financial year 1988-89 was shown at ₹ 25,800/- and in financial year 1990-91 at ₹ 1,75,880/-. The assessee had worked out .....

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nd to have entered to into an agreement for purchase of the said two flats with the builder vide two separate agreements dated 19.11.2004, against which, the assessee claimed that he had received the possession of the said flats only on 20.04.2007, in view thereof, the assessee claimed that he was eligible for deduction under section 54F of the Act. The Assessing Officer from the perusal of payments made to the builder, noted that substantial payments were made by the assessee much before the so .....

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deduction under section 54F of the Act could be allowed against such investment in two flats. Another contention raised by the Assessing Officer was that since you have purchased two flats within period specified in section 54F of the Act as against purchase of only one flat allowable under the provisions of section 54F of the Act, as to why the deduction under section 54F of the Act should not be withdrawn. The next objection of the Assessing Officer was that the land was sold on 12.04.2007, w .....

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explained that though the agreement for purchase of the flats was executed on 19.11.2004, the possession for the flats was obtained only in April, 2007 and date of possession was decisive under the provisions of I.T. Act. The Assessing Officer rejected both the pleas of the assessee since majority payments were made between the period 27.09.2004 to 03.11.2004 and also the assessee had procured housing loan from COSMOS Bank for purchase of the said properties and sum of ₹ 43,65,000/- was d .....

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under para 4.4 at pages 7 to 9 of the appellate order. The CIT(A) noted that the contention of the Assessing Officer that the assessee had received possession of flat Nos.304A & 304B in City Woods prior to 20.04.2007 was incorrect since the assessee had already filed copies of the occupancy certificate dated 18.03.2008 issued by PMC in respect of impugned flat, the first MSEB bill dated 14.08.2007 in respect of the combined flat (Nos.304A & B), the temporary possession letter dated 20.0 .....

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de letter dated 21.08.2013. In the said remand report, the Assessing Officer had mentioned that although the occupancy certificate of PMC was not filed during scrutiny proceedings, the OC issued by PMC confirmed the fact that construction was completed and the building was ready for occupation during the previous year relevant to A.Y. 2008-09. Similarly, the Assessing Officer states that although the first electric bill dated 14.08.2007 was not produced during scrutiny proceedings, verification .....

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ng Officer, it was clear that the assessee had received possession of the two flats in City Woods complex during the impugned assessment year, although the sale agreement was registered with the builder on 19.11.2004. The occupancy certificate of PMC which was government authority, was referred to by the CIT(A). Further, reliance was placed on the ratio laid down by the Hon ble Bombay High Court in CIT Vs. Beena K. Jain reported in 271 ITR 263 (Bom), wherein it has been held that the date of pos .....

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n 54F of the Act was rejected because of various case laws on the issue. The CIT(A) placed reliance on the ratio laid down by the Hon ble Karnataka High Court in CIT Vs. D.Ananda Basappa reported in 309 ITR 329 (Kar), against which SLP filed by the department had been dismissed by the Hon ble Supreme Court on 10.08.2009. The CIT(A) held that purchase of two separate residential units perse, does not dis-entitle the assessee from claiming the deduction under section 54F of the Act. In view thereo .....

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2007. It was further pointed out by the learned Departmental Representative for the Revenue that prior to 12.04.2006, the assessee had paid more than 50% of the total consideration and even the loan was disbursed by the bank on 31.01.2005 of ₹ 43,65,000/-. The plea raised by the learned Departmental Representative for the Revenue was that the money was paid earlier i.e. prior to the window year allowed under section 54F of the Act. In this regard, reliance was placed on the order of Assess .....

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ng Officer and hence, no merit in the order passed by the Assessing Officer:- 1. CIT Vs. Smt. Beena K. Jain (1996) 217 ITR 363 (Bom) 2. ITO Vs. Ritesh Prem Bellara in ITA No.994/PN/2011 and Another, order dated 28.08.2012. 9. We have heard the rival contentions and perused the record. The issue arising in the present appeal is against the claim of deduction under section 54F of the Act. Under the provisions of section 54F of the Act, deduction is allowable to the assessee where the assessee bein .....

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he cost of purchase / construction of the new asset as provided in the section itself. The proviso provides that the provisions of the said sub-section shall not apply where the assessee owns more than one residential house, other than the new asset, on the date of original asset or purchase any residential house other than the new asset within a period of one year after the date of transfer of original asset or constructs any residential house other than the new asset within a period of three y .....

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10. Now, coming to the facts of the case, the assessee during the year under consideration had sold land at Fursungi along with his brother and both of them had 50% share in the said property. The said property was sold for total consideration of ₹ 1,39,20,000/- and 50% share of the assessee was worked out to ₹ 69,60,000/-. The assessee declared income from capital gains at ₹ 58,43,331/- after claiming the indexed cost of land and indexed cost of construction carried out in va .....

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e two separate agreements dated 19.11.2004. The assessee claims that, though the said agreements to sell were entered in November, 2004, the possession of the said flats were received only on 20.04.2007 i.e. after the date of sale of plot of land at Fursungi vide agreement dated 12.04.2007. In view thereof, the plea of the assessee was that he was eligible for the claim of deduction under section 54F of the Act. On the other hand, the Assessing Officer denied the deduction under section 54F of t .....

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ssessing Officer was that the assessee had invested in two adjacent flats which had two separate entrances, two separate kitchens and two separate electric meters, etc. Further, the assessee had also invested into two separate car parking for each of the flats respectively. In view of the above said facts and circumstances, the Assessing Officer was of the view that the assessee was not entitled to the claim of deduction under section 54F of the Act and the same was denied to the assessee. Howev .....

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was obtained in April, 2007 in respect of which, the assessee furnished the copies of occupancy certificate issued by PMC in respect of the impugned flats dated 18.03.2008 and the first bill of MSEB dated 14.08.2007 in respect of combined flats i.e. flat Nos.304A and 304B. All these documents, the assessee claims to have filed before the Assessing Officer, but the CIT(A) confronted the same to the Assessing Officer in appellate proceedings and remand report was received from the Assessing Offic .....

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mporary possession letter dated 20.04.2007 issued by the builder which the Assessing Officer admitted that the assessee had furnished during the course of assessment proceedings. In view of the above said evidences and the remand report of the Assessing Officer, it is apparent that the assessee had received the possession of the two flats in City Woods complex during the captioned assessment years though the agreement of purchase of the said flats was executed on 19.11.2004. In view of the above .....

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for occupation and had obtained possession of the flat and the date of entering into the agreement to purchase the said flat had not to be considered. Following the said proposition of law propounded by the Hon ble Bombay High Court in CIT Vs. Beena K. Jain (supra), the date to be considered is the date on which the assessee had occupied the said property and not the date on which it had entered into an agreement to purchase the property. In the facts of the present case, the assessee had enter .....

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