TMI Blog2016 (1) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... S K Mahapatra ORDER PER AMIT SHUKLA, JM: The aforesaid appeal by the revenue and Cross Objection filed by the assessee are against impugned order dated 11.09.2013 passed by CIT(A)-31, Mumbai for the quantum of assessment passed u/s 143(3) for the assessment year 2009-10. We will first deal with Revenue s appeal, vide which following grounds have been raised : 1. The Ld CIT (A) erred on the facts and circumstances of the case in allowing the deduction u/s 54 of the I.T Act, 1961. 2. The Ld. CIT(A) erred in accepting the date of registration of Deed of Rectification i.e. 19.04.2008 as the date of purchase of new property considering the same to be within 1 year before the sale of capital asset. 3. The Ld. CIT(A) erred to appreciate that the date of registration of agreement i.e. 31.01.2007 shall be considered for judging the eligibility of deduction u/s 54. 4. The Ld. CIT(A) erred in not interpreting the decision of the Hon ble Delhi High Court in the case of R.L. Sood - 245 ITR 727 wherein it was held that for the purpose of section 54, the date of agreement to purchase should be taken as the date of purchase . 2. Brief facts are that, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty for which the assessee has drawn support for his claim was as under :- Date of Sale of Old Property : 30.03.2009 Date of Original Agreement for New Property : 31.01.2007 Date of Rectification Deed for New Property : 19.04.2008 Date of possession : 22.01.2009 Date of Issue of Occupation Certificate : 24.02.2010 4. Thereafter, he analyze the rectification Deed and allowed the assessee s claim after observing and holding as under :- The argument of the appellant is that the rectified deed is to be taken as the deed for purchase of new flat. A perusal of the documents in question reveals that the Agreement for Sale dated 23.01.2007 was registered vide number BDR-1-776/2007 and the subsequent Deed of Rectification dated 19.04.2008 was registered vide number DR-5272/1/2008. Thus both documents were duly registered as per the provisions of the Maharashtra Ownership Flats Act (MOFA), 1963. A careful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usage. The Court held as follows: 3. We find no reason to divorce the ordinary meaning of the word purchase as buying for a price or equivalent of price by payment in kind or adjustment towards an old debt or for other monetary consideration from the legal meaning of that word in section 54(1). If you sell your house and make a profit, pay Caesar what is due to him. But if you buy or build another subject to the conditions of section 54(1) you are exempt. 6.5.2 In the case of CIT vs Shahajada Begum (AP) 173 ITR 397, the appellant had sold a house used for self occupation, purchased another and had claimed exemption u/s 54 in respect of the capital gains arising from the sale of the first property. The claim u/s 54 was denied by the Assessing Officer, holding, that the crucial date for determining when the property was purchased was the date of registration of the conveyance deed (albeit for the purchase of the new property). The Hon ble High Court held that ownership purchase of the new property). The non Die High Court he'd that ownership would be taken from the point in time when 'domain and control were given into the assessee s hands' and allowed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition precedent for attracting section 54. In the instant case, the whole consideration was paid, possession of the flat was obtained and it was actually put to use for dwelling within 4 months, as a result exemption contemplated under section 54 was clearly attracted. 6.54 In the instant case, the appellant had duly registered the Deed of Rectification on 19.04.2008 and this fell within the window provided for investment u/s 54 applicable in this case. The ownership of the' new flat clearly vests in the appellant through the execution of this document. In addition, the appellant has received possession from the developer in January 2009 and the Occupation Certificate is also dated 24.02.2010, thus both these events are also falling within the investment window as per section 54. 6.5.5 Thus after due consideration of the entire conspectus of facts available on record and the judicial principles laid down which have been discussed in the proceeding paragraphs, 1 hold that the appellant is entitled to deduction u/s 54 of ₹ 30,07,775/- the grounds, raised by the appellant are allowed . 5. Before us, the Ld. Counsel referred to the following chronology of ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction u/s 54 of the Act. 2. Without prejudice to the above, the learned CIT(A) ought to have held that the assessee is entitled to deduction u/s 54 of the Act even if the date of rectification deed i.e. 19.04.2008 is not considered to be the date of purchase of new flat. 3. Learned CIT(A) ought to have calculated Indexed Cost of Acquisition of 140 (year of acquisition by Original Owner) instead of 463 (being the year of acquisition by assessee vide inheritance) as the cost of Inflation Index for the year of purchase . 9. Ground no. 1 2 will become infructuous in view of the finding given in the Department s appeal, hence they are dismissed. 10. As regards the issue raised in ground no.3, it has been admitted by both the parties the same is covered by the decision of Hon ble Bombay High Court in the case of CIT vs. Manjula J Shah reported in [2013] 355 ITR 474 (Bom). Accordingly, we direct the AO to give benefit of cost of inflation Index for acquisition with reference to the year in which the previous owner had acquired the asset as per the principle laid down by the Hon ble jurisdictional High Court. Accordingly, ground no. 3 is treated as allowed. 11. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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