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2016 (6) TMI 1075

n 29.04.2009 - AO observed that assessee’s claim would amount providing him with a window of four years for meeting the conditions of section 54, which was not the intention of the provision - Held that:- The language of section 54 comprehends that the asset transferred should be a residential building, and the asset invested it should also be a residential building, and the investment should be made within the time specified therein. The time specified in this case, within one year before and two years after, is the period between 9.3.2007 and 9.3.2010. The investment which is eligible for deduction would therefore, be restricted to ₹ 17,50,674/- on account of plot, and ₹ 8,12,464/- on account of construction. After careful consideration of the letter and spirit of section 54, it was rightly held that the assessee is entitled to the exemption under section 54 of ₹ 25,63,138. Hence, the ld. CIT(A) gave the partial relief on this issue on the right footing. Therefore, we do not find any infirmity in the well reasoned order passed by the Ld. CIT(A) on the restriction of addition in dispute, hence, we uphold the finding of the ld. CIT(A) on this issue. - Decided agai .....

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Singh (Purchase of ownership) 2 DD NO. 488245 28.03.2006 136000/- Bank Transfer Charges to G Noida 3 DD NO. 488247 28.03.2006 285000/- January 2006 Installment 4 DD NO. 973306 21.04.2006 1000007- Purchase of ownership 5 DDNO. 489411 21.06.2006 260165/- July 2006 Installment 6 DD NO. 007881 28.12.2006 260165/- Jan 2007 Installment 7 DDNO. 154069 18.05.2007 34085G/- Miscellaneous Charges for registration 8 DDNO. 154755 29.06.2007 260165/- June 2007 Installment 9 DD NO. 569097 01.01.2008 2601 65/- Jan 2008 Insallment 10 DD NO. 455955 17.06.2008 260 165/- June 2008 Installment 11 Stamp Papers 612300/- Charges for registration 12 Gnoida Misc. & BanK Charges 17023/- Total Expenses Till Date of Return For Financial Year 2007- 08 4692004/- 3. Because, the Ld C.I.T (A) has erred in overlooking the fact that "A" was issued possession letter by GNIDA on 18/05/2007 which is within one year of sale of Residential house on 01.03.2008 and "A" is entitle to total deduction of ₹ 46,92,004 under the nature & circumstances of the case. 4. Because in case of immovable property possession the alleged property was transferred only on 18/05/2007 by Greater Noida Industr .....

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Ld. CIT(A), who vide his impugned order dated 1.12.2011 has partly allowed the appeal of the Assessee. 6. Against the order of the Ld. CIT(A), both Assessee as well as Revenue are in Cross Appeals before us. 6.1 In this case, Notice of hearing to the assessee was sent by the Registered AD post, in spite of the same, assessee, nor his authorized representative appeared to prosecute the matter in dispute, nor filed any application for adjournment. Keeping in view the facts and circumstances of the present case and the issue involved in the present Appeal, we are of the view that no useful purpose would be served to issue notice again and again to the assessee, therefore, we are deciding the present appeal exparte qua assessee, after hearing the Ld. DR and perusing the records. 7. We have heard the Ld. DR and perused the records available with us, especially the order of the Ld. CIT(A). 7.1 Apropos ground no. 1 which is a common ground raised in both the cross appeals filed by the Assessee and the Revenue relating to restriction of disallowance to ₹ 21,28,866/- as against ₹ 46,92,004/- made by the AO on account of disallowance of exemption claimed u/s. 54 of the Act. 7.2 .....

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ntegral Design 2,50,000 2,55,000 26,675 5,000 2 Jag Mohan 5,000 15,000 1,040 10,000 3 Mohd. Arif (Salary) - 43,200 400/- 43,200 4 Satish Singh 21,854 38,854 2,250 13,000 5 HVS Design House 6,000 16,000 - 10,000 81,200/- (3.1) On the issue of long term capital gains, it was submitted that the residential property at Sun City Heights, Gurgaon, was sold on 01.03.2008, and the investment in the residential plot was made on 21.05.2007, i.e. within the prescribed period of one year before the date of sale. It was reiterated that the construction of the house was completed by 21.04.2009, within the period of two years from the date of sale. The appellant relied on the CBDT circular No. 667 dated 18.10.1993, wherein it was clarified that for the purposes of sections 54 and 54F, the cost of a residential house included the cost of the plot, being an integral part of the cost of the house, whether purchased or built. The appellant filed a copy of the receipt issued by the Greater Noida Industrial Development Authority (GNIDA) dated 21.04.2009, and a certificate from GNIDA dated 05.05,2011 clarifying that the receipt of 'building plan and documents for occupancy certificate' dated 21. .....

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ulk of payments prior to the period of one year before the date of sale. Out of the total consideration of ₹ 46,92,004/- for purchase of the plot, ₹ 29,41,330/- was paid between 31.3.2006 and 28.12.2006 and ₹ 17,50,674/- was paid after 18.5.2007. It can be seen that registration has taken place later than 17.6.2008. Hence, the appellant s claim, so far as the plot is concerned, spans a period of two years before the date of sale. It is the contention of the Assessing Officer that the property should either have been purchased within the period of one year before and two years after the date of transfer, or been constructed within the period of three years after the date of transfer. The Assessing Officer has relied on the judgement of the Gujarat High Court in the case of Smt. Shantaben P. Gandhi vs. CIT [1981] 129 ITR 218, wherein it was held that the exemption under section 54 is not available where the new construction is made before the transfer of the existing house, The appellant on the other hand, has relied on the judgement of the Allahabad High Court in the case of CIT vs. H.K. Kapoor [1998] 150 CTR 128, wherein it was held that exemption on capita' g .....

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the self financing scheme of Delhi Development Authority, payment of first instalment of the price of the flat within 2 years of sale of original property would entitle the assessee to claim exemption even if construction of the flat was not complete in two years. We further find that the Ld. CIT(A) has relied upon the decisions of the Delhi High Court in the case of Balraj vs. CIT [2002] 123 Taxman 290, and in the case of CIT vs R. L Sood [2000] 108 Taxman 227, in which the Hon ble Court has held that there is no requirement that a new house must be registered in the assessee's name within the prescribed period, and only the date of agreement to purchase is relevant. The language of section 54 comprehends that the asset transferred should be a residential building, and the asset invested it should also be a residential building, and the investment should be made within the time specified therein. The time specified in this case, within one year before and two years after, is the period between 9.3.2007 and 9.3.2010. The investment which is eligible for deduction would therefore, be restricted to ₹ 17,50,674/- on account of plot, and ₹ 8,12,464/- on account of const .....

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the details in a fresh list before the Assessing Officer, however, the same was not accepted and treated as an afterthought. In my opinion, the Assessing Officer should have verified the payments of fees and salary as well as the TDS return, before summarily rejecting the explanation. The appellant is seen to have deducted tax in all cases where the fees for professional services exceeded ₹ 20,000/-. In the case of Ms. Divya Saluja, the salary paid of ₹ 25,000/- was far below the taxable limits. It is held accordingly that there was no case for making the disallowance u/s.40(a)(ia). The addition made on this account of ₹ 1,06,200/- is deleted. 8.3 On going through the aforesaid finding of the Ld. CIT(A) on the issue in dispute, we are of the view that CIT(A) has deleted the addition of ₹ 1,06,200/- made by the AO u/s. 40(a)(ia) of the Act on the ground that assesse has deducted tax in all cases where the fees for professional services exceeded ₹ 20,000/-. Therefore, we do not find any infirmity in the well reasoned order passed by the Ld. CIT(A) on the addition in dispute and hence, we uphold the finding of the ld. CIT(A) on this issue. Therefore, thi .....

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