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2015 (10) TMI 1714 - ITAT CHENNAI

2015 (10) TMI 1714 - ITAT CHENNAI - TMI - Exemption claimed u/s 54 or alternative claim u/s 54F - whether the property sold is a vacant land or residential house property? - whether the property takes the character of land or house property? - CIT(A) allowed the claim - Held that:- The property was sold on 03.07.2009. Even though it is vacant land, without prejudice to the rights of the assessee, assessee is eligible for exemption under Section 54F of the Act.

Before the due date und .....

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of building and land appurtenant, and the issue is on different facts where the construction was in a smaller area compared to the open land left on which the building is constructed. The same cannot be applied to the present case, as the assessee in toto has sold the land along with building. - Decided in favour of assessee. - ITA No.2103/Mds/2013 - Dated:- 11-9-2015 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER For The Appellant : Sh. P. Radhakrishnan, JCIT .....

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iled to appreciate that the original property (Okkaiam Thoraipakkam property) sold by the assessee, on 3.7.2009, was only a vacant land, the sale of which will not qualify for deduction u/s 54 of the I.T. Act. 3.1. Without prejudice to the above ground of appeal, the learned CIT(A) erred in giving direction to grant deduction u/s 54F on the land cost and cost of construction of the building constructed in Malli Enclave , when the purchase of land as well as construction agreement were entered in .....

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short 'the Act'). Further, the case was selected for scrutiny and notices under Section 143(2) and 142(1) were issued. During the financial year 2009-10, the assessee sold a residential house property for ₹ 1,12,00,001/- and claimed exemption under Section 54 of the Act. As the due date for filing of return was nearing, the assessee deposited long term capital gain in Capital Gains Account Scheme on 26.07.2010 and claimed the benefit of long term capital gain exemption. Whereas, th .....

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under Section 54 / 54F of the Act. In the course of hearing proceedings before the CIT(Appeals), the assessee submitted a copy of computation of income relating to assessment year 2009-10, where the rental income from house property was assessed to tax under the head income from property . Further, the assessee demonstrated that an amount of ₹ 93 lakhs was invested under Capital Gains Scheme with a nationalized bank. Before the CIT(Appeals), the assessee has also made an alternative claim .....

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₹ 1,08,19,213/- and the builder has handed over the possession of the residential property on 30.05.2012 along with Completion Certificate. The purchase of land and construction of property was completed within a period of three years from the date of transfer of the property sold, the CIT(Appeals) has observed in para 7 of his order as follows:- 7. The AR of the appellant has filed copy of the return of income filed for the AY 2009-10 for showing income from house property which is given .....

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ich includes the cost of land along with registration and other expenses at ₹ 46,32,535/- and superstructure as per construction agreement dated 2709.2011 at ₹ 61,86,678/-. This alternative claim has been made before the Assessing Officer also that if exemption of u/s 54 is not considered the same may be considered u/s 54F of the I.T. Act in case the property sold is treated as lands other than residential house property, which qualifies for the exemption u/s 54F of the I.T. Act. How .....

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le for exemption under Section 54 of the Act and also concluded that the order of the CIT(Appeals) is erred in both law and facts. The CIT(Appeals) has relied on additional evidence. Hence, the order of the CIT(Appeals) be set aside to the file of the A.O. 6. On the other hand, the Ld.counsel for the assessee submitted that the property purchased by the assessee was a long term asset. The construction was made and the rental income was received and also offered to tax for assessment year 2009-10 .....

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from house property , which the assessee has complied and as a pre-condition of the buyer of the property, the house was demolished and sale deed was executed for ₹ 1.12 Crores. The long term capital gains could not be appropriated for purchase or construction of new residential property before due date of return of income. Under Section 139(1) of the Act, the amount was deposited on 26.07.2010 in a nationalized bank under Capital Gains Account Scheme. In continuation of compliance of capi .....

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ntial house properties within specified time. The assessee claimed exemption under Section 54 of the Act by purchasing land and construction of residential house which is not disputed by the Assessing Officer. 8. The only point of dispute arises is whether the property sold is a vacant land or residential house property. It was submitted before the CIT(Appeals) that the property, which was sold, was let out on rent in the earlier years and this was duly supported by the return of income filed fo .....

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