TMI Blog2015 (5) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to deduction u/s.54 as per the facts of the case. Therefore, in view of the various decisions, Paramjeet Singh Chhabra [2015 (4) TMI 939 - ITAT INDORE] relied on by the CIT(A) and in view of the CBDT Circular No. 14 (XL-35) dated 11-04-55, we are of the considered opinion that the relief which is otherwise due to the assessee should not be denied. In this view of the matter and in view of the detailed reasoning given by the CIT(A) and in absence of any distinguishing features brought to our notice, we do not find any infirmity in the order of CIT(A). Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed. - Decided against the revenue. - ITA No. 1924/PN/2013 - - - Dated:- 23-1-2015 - Shri R.S. Padvekar and Shri R.K. Panda, JJ. For The Assessee : Shri Pramod Shingte For The Revenue : Shri Rajesh Damor ORDER PER R.K.PANDA, AM : This appeal filed by the Revenue is directed against the order dated 26-08-2013 of the CIT(A)-I, Nashik relating to Assessment Year 2009-10. 2. Facts of the case, in brief, are that the assessee is a practicing Chartered Accountant and filed his return of income on 30-09-2009 declaring total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad Ruparel Vs. ACIT reported in 27 SOT 61, he held that exemption u/s.54F is not allowable where the assessee has purchased new house out of funds borrowed from bank. Therefore, he also rejected the alternate claim of deduction u/s.54F. 2.5 The AO further noted that the assessee has made claim u/s.54D of capital gain on sale of Bungalow at Plot No.9, S.No.38/1C at Kamatwade, Nashik. The said bungalow was sold by the assessee for ₹ 35 lakhs and the sale deed was registered on 16-05-2008 with the Joint Sub-Registrar, Nashik. According to the AO, the provisions of section 54D are applicable in case of compulsory acquisition of lands and buildings. However, here there was no such compulsory acquisition. Therefore, he rejected the claim of deduction of ₹ 18,64,689/- made u/s.54D of the I.T. Act. Thus, effectively, the AO disallowed the long term capital gain on sale of Plot No.40 claimed u/s.54 amounting to ₹ 4,09,322/- and the claim of deduction u/s.54D amounting to ₹ 18,64,689/-. 3. Before CIT(A) the assessee submitted that the assessee has purchased a new residential property by way of deed of agreement on 10-08-2007 and took the possession on the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the tax legitimately. This was the clear intention of the Legislature. 6.2 In the above background I have considered and admitted the appellant's submission in regard to claim of deduction u/s 54 of the Act. The appellant vide submission dated 26/08/2013 has not pressed for deletion of addition of ₹ 4,09,322/- on account of L.T.C.G. on sale of plot No.40, Mhasrul. This addition is, therefore, confirmed. As regards claim of deduction of ₹ 18,64,689/- u/s 54 of the I.T. Act. I have gone through the relevant provisions of section 54 and the facts of the appellant's case. The appellant has sold a bungalow at plot No.9, Kamathwada for ₹ 32,00,000/- vide sale deed registered on 16/05/2008. This bungalow was received by the appellant as a gift from his father who had acquired the said property on 20/12/2000. The appellant vide sale deed dated 10/08/2007 purchased a residential flat from M/s Rushiraj Builders Pvt. Ltd. for ₹ 2,00,04,500/-. The appellant had entered into an agreement for purchase of the said flat vide sale agreement registered on 25/09/2006 and had paid the stamp duty of ₹ 85,600/- at the time of registration of the above agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say, (i) if the amount of the capital gain is greater than the cost of the residential house so 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 purchase 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 trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property. Subsequently (but within the specified period) he borrowed funds and purchased a new house. The AO denied deduction u/s 54 on the ground that the new house had been purchased out of borrowed funds and not out of the consideration received for the old house. On appeal, the Tribunal and High Court upheld the claim on the ground that s. 54 merely required the purchase of the new house to be within the specified period. The source of funds for the purchase was irrelevant . The same view has been taken by the Kerala High Court in K. C. Gopalan 162 CTR 566. 6.4 In view of the above facts and in the circumstances of the case, the appellant's claim of deduction of ₹ 18,64,689/- u/s 54 is in order. The AO's addition of ₹ 18,64,689/- on a/c of Long Term Capital Gain is unjustified and is therefore deleted. 7. Hence while the AO's addition of ₹ 4,09,322/- is confirmed, addition of ₹ 18,64,689/- is deleted. AO is directed accordingly. 5. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-I, Nashik was j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by law, officers should : - (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Although, in the instant case, the assessee is a practicing Chartered Accountant and who is supposed to be conversant with the law, however, he has made the claim under the wrong section54D instead of the correction section 54. However, he is otherwise entitled to deduction u/s.54 as per the facts of the case. Therefore, in view of the various decisions relied on by the CIT(A) and in view of the CBDT Circular cited (Supra), we are of the considered opinion that the relief which is otherwise due to the assessee should not be denied. In this view of the matter and in view of the detailed reasoning given by the CIT(A) and in absence of any distinguishing features brought to our notice, we do not find any infirmity in the order of CIT(A). Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed. 7. In the result, the appeal filed by the Revenue is dismissed. Pronounced in the Open Court on 23-01-2015 - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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