TMI Blog2015 (9) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... the section are met. A beneficial provision, as section 54F, has even otherwise to be construed liberally. In the case of allotment of flats through self-financing schemes, as by the Delhi Development Authority, the same is considered as an acquisition by way of construction, entitling the assessee to complete the test of dominion over an increased period of time, i.e., three years, as provided by the statute for the same (construction) after the date of transfer. In the facts of the present case, the assessee paid ₹ 51 lakhs in July, 2007, receiving the letter of allotment. Whether the same would amount to a purchase of the relevant asset would be the next and the relevant question to be asked. Even though the same may not by itself be considered as constituting a "purchase" in terms of test laid down by the hon'ble court in the case cited supra, the subsequent payments would definitely lead to one, so that the payments made in July, 2007 can, in retrospective, only be considered as towards purchase of flat B, the new asset. But for the payments in July, 2007, it may be appreciated, the payment/s during the relevant previous year (Rs. 40 lakhs) would not result in the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily member. During the year, the assessee paid ₹ 40 lakhs to the builder, besides another ₹ 5,19,312 towards stamp duty and registration charges (paper book page 1) for the Radha Krishna (new) flat, and which formed the basis for the claim of deduction under section 54F in its respect. The same was found not acceptable by the Assessing Officer (A.O.) inasmuch as the assessee had on the relevant date, i.e., the date of transfer of industrial gala, the original asset, more than one residential house, being : (a) Residential flat at 204, Koteshwar Palace, Sahar Road, Andheri (E), Mumbai-400 069 (hereinafter referred to as Flat A ) ; (b) Flat No. 401, Radha Krishna Niwas, Mumbai (hereinafter referred to as Flat B ). Even though the purchase agreement for Flat B is dated March 24, 2009, the date of its purchase would be that of its allotment, i.e., July 27, 2007. The assessee had, in fact, already claimed exemption under section 54F for the purchase of new flat or the new asset at ₹ 40 lakhs for the assessment year 2007-08. In appeal, the assessee found favour with the learned Commissioner of Income-tax (Appeals) on the basis that the Flat B itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny residential house, other than the new asset, within a period of one year after the date of transfer of the original asset ; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset ; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head 'Income from house property'. Explanation.-For the purposes of this section,- 'net consideration', in relation to the transfer of a capital asset means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (emphasis supplied) The Revenue's case, as projected per its grounds, is that the first appellate authority had failed to consider that flat B stood already purchased by the assessee on July 27, 2007, i.e., prior to the transfer of original asset on July 21, 2008, by paying ₹ 51 lakhs to the builder, so that she had, as on the relevant date, two reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the conditions of the section are met. A beneficial provision, as section 54F, has even otherwise to be construed liberally. The decisions by the Tribunal, as in the case of Smt. Anagha Ajit Patnekar v. ITO [2006] 9 SOT 685 (Mum) and Mrs. Krishnadevi Kejriwal v. ITO (in I. T. A. Nos. 93/Mum/2009 and 2961/Mum/2008 dated June 25, 2010) support the assessee's case. 3.3. It would at this stage be relevant to discuss another aspect of the matter, and which to our mind is the moot point arising in the instant case, not addressed by the first appellate authority, i.e., as what constitutes a purchase for the purposes of section 54F or, for that matter, the other pari materia provisions. The same, without doubt, is related to the issue discussed by us at para 3.2 above, and which explains our stating of it as another aspect of the matter. That is, to put it succinctly : Whether the purchase of flat B took place on July 27, 2007 or on March 24, 2009? This is relevant as only upon purchase could an assessee be said to have satisfied the qualifying condition of section 54F(1), entitling it to exemption thereunder. There is no question of the issue not arising in the instant case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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