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2016 (7) TMI 1039 - ITAT MUMBAI

2016 (7) TMI 1039 - ITAT MUMBAI - TMI - Eligibility of exemption u/s 54 - whether date of purchase is the date on which agreement for purchase is registered? - Held that:- From the reading of section 54(1), it is clear that section concerns two type of house property, namely (i) original asset and (ii) the new asset. Original asset here means the house property on the transfer whereof the capital gain arises. The new asset refers to the property which has been purchased or constructed within the .....

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te on which agreement for purchase is registered - Decided against revenue - ITA NO.1698/Mum/2013 - Dated:- 16-6-2016 - Shri Joginder Singh, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Assessee : Shri Jignes Shah For The Revenue : Shri B.S. Bist-DR ORDER Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 13/12/2012 for Assessment year 2009-10 of the Ld. First Appellate Authority, Mumbai. The only ground raised in the present appeal i .....

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counsel for the assessee, defended the order of the First Appellate Authority by placing reliance upon the decision in Smt. Sundar Kaur Sujan Sing Gadh (205) 3 SOT 206 (Mum.) order dated 27/02/2005, Purshottam Govind Bhai vs ITO (1985) 13 ITD 939 (Bom.), CIT vs Beena K. Jain (1994) 75 taxman 145 (Bom.), Vinod Kumar Jain vs CIT (2010) 195 taxman 174 (P & H) and CIT vs R. L. Sood (2000) 245 ITR 227 (Del.). 2.1. We have considered the rival submissions and perused the material available on rec .....

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the copy of the agreement before the Assessing Officer for construction of residential property, which was entered into an agreement on 09/08/2006 and the construction was completed along with the possession 08/01/2009. The stand of the ld. Assessing Officer and also of the ld. DR is that for availing the exemption u/s 54 has to satisfy that the new asset came into existence within one year before and two years after the sale of residential property. We find that the residential property was sol .....

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rchase did not change the date of purchase. We note that the old flat was purchased on 31/05/2001 for ₹ 21,38,860/- and sold on 01/09/2008 for ₹ 1,04,00,000/-. The date of agreement of the flat under construction was 09/08/2006, whereas the possession of the constructed property was taken on 08/01/2009 (as per letter from M/s K. Raheja Universal Pvt. Ltd.) at the cost of ₹ 1,02,13,685/-. The factual matrix was duly examined by the Ld. Commissioner of Income Tax (Appeal) and he .....

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d occupation certificate from the municipality. We find that there are various decisions with respect to the date whether it is to be considered the date of agreement or the date of the possession. Admittedly, through agreement dated 09/08/2006, the assessee acquired the valuable right but cannot be said that the new flat was purchased. On the date of agreement, the building was under construction and the assessee paid installments to the builder as has been reflected at page 19 of the impugned .....

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5 taxman 145 (Bom.), wherein, assessee claimed exemption u/s 54F of the Act by making investment in the residential house. The assessee sold the premises on 23/07/1987 resulting into long term capital gain of ₹ 24,05,050/-. The assessee entered into an agreement dated 04/09/1985 for purchase of a flat for ₹ 12,26,751/- and the sale was registered on 27/10/1985. The assessee paid consideration amount on 29/07/1988 and got the possession of the flat on 30/07/1988. The assessee claimed .....

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n otherwise, when two views are possible, which favours the assessee, has to be preferred. We are, usefully, reproducing hereunder the relevant provision of section 54 of the Act for ready reference and analysis:- 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, .....

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lace, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any .....

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e reduced by the amount of the capital gain. (2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case no .....

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