9911796707
TMI Blog2015 (5) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer towards purchase of residential property. 2.1 The AO further noted that the assessee has purchased a Flat No. B-402 in Rushiraj Heights Apartment, Gangapur Road, Nashik for Rs. 20,04,500/- from M/s. Rushiraj Builders Pvt. Ltd. The agreement to sale was made on 25-09-2006 vide Registration No.05872 with Joint Sub-Registrar, Nashik. Sale deed was made on 10-08-2007 and the completion certificate was received by the builder on 09-02-2007. 2.2 From the various details furnished by the assessee, the AO came to the conclusion that the conditions u/s.54F are not fulfilled from the following sequence of events : - Agreement to sale of new property made on 25-09-2006 - Completion certificate recd. By builder 09-02-2007 - Sale deed (deed of apartment) made on 10-08-2007 - Possession of flat given by builder on 10-08-2007 - Date of sale of plot No.40, Mhasrul - (Long Term capital asset for the purpose of section 54F) 23-03-2009 2.3 From the above, the AO noted that since the assessee has purchased the flat much before the date of transfer of long term capital asset, therefore, the claim of deduction u/s.54 is incorrect. Accordingly, he disallowed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chartered Accountant yet he has faltered in claiming deduction under the correct provisions of the I.T. Act. In the original assessment proceedings, the deduction was claimed under 54D of the I.T. Act which was stated to be a typographical mistake. In the grounds of appeal the deduction was claimed u/s 54F of the I.T.Act and during the appellate proceedings it was corrected to Sec. 54 of the I.T.Act. 6.1 It is seen that the AO has rejected the appellant's claim of deduction of Rs. 18,64,689/- u/s 54D of the Act stating that Sec. 54D requires compulsory acquisition of the property. The appellant vide his submission before me has corrected the mistake in this regard, i.e. has claimed deduction u/s 54 of the Act. The Hon'ble ITAT, Indore in the case of Paramjeet Singh Chhabra V. ITO (2013) 35 taxmann.com 612 intrealia has held as under:- 1) Even if a wrong section was mentioned by the assessee in the return, it was duty of the AO to assist the taxpayer in a reasonable way and provide the relief if due to the assessee. This attitude rather would help the revenue in assessing the income correctly; 2) A correct advice by the department would inspire the confidence of public a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he possession of the residential flat within a period of one year prior to the date of sale of Bungalow (16/05/2008). While for the purpose of section 54 date of registration of sale deed for purchase is not relevant [CIT Vs. R.L. Sood (2000) 245 ITR 727 (Del.)], date of taking over possession of property purchased is relevant for computing the prescribed time limit. [CIT V. Mrs. Shahzadda Begum (1988) 173 ITR 397(AP). In view of the facts of the case and the legal position in this matter it is held that the appellant purchased the new residential flat within the time prescribed in section 54 of the Act. As regards utilization of the capital gains in purchasing the new house, the relevant provisions of Section 54 are as under:- 54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then, (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. 6.3 As is evident, there is no requirement in s. 54 that the sale proceeds of the old house have to be utilized for purchase of the new house. The fact that the section permits a purchase of the new house one year before the sale of the old house itself makes it clear that such utilization is not even possible. All that the section requires is that the new house property should be purchased within the time period specified. The source of funds is irrelevant. The Bombay High Court in the case of CIT vs. Dr. P.S. Pasricha has held as under:- "In this case also, the assessee sold a house and used the sale proceeds to buy commercial property. Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong section instead of the correct section, the same in our opinion, should not be a ground to deny the benefit of deduction otherwise allowable to the assessee. 6.1 The CBDT Circular No.14 (XL-35) dated 11-04-55 (copy of which is placed at paper book page 7) states that officers of the department must not take advantage of ignorance of an assessee as to his rights. The relevant observation at clause (3) of the said circular reads as under : "3. Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessees on whom it is imposed by law, officers should : - (a) draw their attention ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
