TMI Blog2017 (9) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... r ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) -20, Mumbai dated 17.04.2014 for the Assessment Year 2010-11. The only grievance of the assessee in his appeal is that the Ld.CIT(A) erred in denying the deduction u/s 54 of the Act. 2. Briefly stated the facts are that the assessee sold residential house property and claimed deduction u/s 54 of the Act. The Assessing Officer required the assessee to justify the claim for deduction u/s 54 of the Act for the reason that the assessee sold the property by entering into formal sale agreement on 11.09.2009 and since exemption u/s 54 of the Act is eligible for a new residential house which is purchased within the period of one year prior to the date of transfer of capital asset being residential house. The property was purchased by the assessee by entering into agreement dated 18.08.2007 and in which case according to the Assessing Officer the assessee not complied with the condition of purchasing a new flat within a period of one year prior to transfer of the existing property. 3. The assessee furnished its reply stating that though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gains u/s 54 of the Act. 7. On a perusal of the decision of the Hon'ble Jurisdictional High Court we find that the issue has been considered by the Hon'ble High Court wherein it was held as under: - 1. The assessee, who is the respondent before us, had sold office premises on July 23, 1987, which resulted in long-term capital gains of ₹ 24,05,050. Prior to the sale she had entered into an agreement for purchase of a residential flat which agreement was dated September 4, 1985. The agreement was for purchase of a flat for a total consideration of ₹ 12,26,751 On the date of the agreement of sale, the assessee paid a sum of ₹ 1,35,000 as earnest money. This agreement was registered on October 27, 1985. The construction of the flat was finally completed in July, 1988. The assessee paid the consideration amount of ₹ 10,44,375 plus ₹ 47,376 on July 29, 1988, and she was put in possession of the said flat on July 30, 1988. The assessee claimed the benefit of exemption under section 54F of the Income-tax Act, 1961. She has accordingly been granted by the Tribunal exemption of Rs. 11,04,423 under section 54F of the Income-tax Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esidential premises instead of date of the sale agreement and the date of registration, has been held in favour of the assessee by rejecting appeal of the Revenue. 9. We also find that similar issue has been decided by the Coordinate Bench in the case of Bastimal K Jain v. ITO in ITA.No.2896/Mum/2014 wherein the Coordinate Bench held as under: 5. Before us the learned counsel for the assessee argued that the assessee entered into an agreement with M/s. Sharpmind Developers on 28.12.2007. The flat intended to be purchased by the assessee was not at all constructed on 28.12.2007 and though the agreement for purchase was entered into is just a right for purchase of flat in the proposed construction and eventually property s possession was given to the assessee by the builder only on 11.09.2009 because the flat got ready and occupancy certificate was received by the builder from the BMC only on 31.03.2009. In such facts, the learned counsel for the assessee stated that acquisition of property is to be considered as and when the possession of the flat was given to the assessee by the builder and that date falls as on 11.09.2009. According to the learned counsel for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 981] 130 ITR 393 (Ori.) (2) K.P, Varghese v. ITO [1981] 131 ITR 597 (SC) (3) CIT v. Mrs. Shahzada Begum [1988] 173 ITR 397/38 Taxman 31 (AP) (4) Purushottam Govind Bhat v. First ITO [1985] 13 ITD 939 (Bom.) (5) Damodar Raheja v. Eighth ITO [1984] 10 ITD 75 (Mad.). And finally Tribunal decided the issue that in case the assessee is allowed possession of the property, only from that date the ownership is to be considered for the purpose of deduction u/s. 54 of the Act. Tribunal held as under: 6. We have carefully gone through the facts of the case and the rival contentions. The question before us, though it is simple, raises problems of importance in metropolitan cities where there exists lot of problems for meeting basis human needs 'house'. Just to encourage assessee, Section 54 is enacted to give relief of exemption from capital gains in the case of assessee selling existing residential units and acquiring any other residential unit. This has to be done within a period of one year either before or after the date of sale of the first house property. If that is done so, capital gains arising on transfer of the first house property will be exempt to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of fact, if not in law, therefore, it would be correct to say that the assessee has purchased a residential property. 8. Left with the relevant date to decide in the facts of the case, the decision of the Tribunal in Purushottam Govind Bhat's case (supra) really comes to favour the assessee. In the said case, the assessee joined the society in 1977. He was allotted a flat and occupied the same on 1-1-1980. The Tribunal held, joining the society and paying the amounts cannot really amount to purchase of a house. On the contrary, allotment of the flat would certainly give the assessee certain specific obligations and rights. The manner in which the amounts are paid and the period over which they are paid may not be of much relevance. Considering the peculiar circumstances of that case, it was held that the benefit of Section 54 should be extended by taking the date of allotment and occupation as the relevant date of purchase. Following the said decision, we are inclined to hold that in this case also, the assessee has, though, entered into agreement for purchase of flat on 22-10-77, paid the money during 1977 to 1979, but the relevant date to be taken for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Jindas Panchand Gandhi [2005] 279 ITR 552 (Guj) wherein, the issue was regarding the claim of deduction u/s. 80T and also whether the asset is a Long term or Short term, not the claim of deduction u/s. 54 of the Act. 8. In such circumstances and in the given facts of the case and also the case law relied on by learned Counsel for assessee in the case of V M Dujodwala (supra) coordinate bench of this Tribunal and also of Hon ble Bombay High Court in the case of Smt. Beena K Jain, supra, we are of the view that the assessee s claim of deduction u/s. 54 of the Act is to be reckoned from the date of handing over of the possession of the flat by the builder to the assessee i.e. 11.09.2009, and if we take that date, the assessee is entitled to deduction u/s. 54 of the Act because the assessee has sold his residential flat on 24.02.2010. We allow the assessee s claim and order accordingly. 10. Therefore, respectfully following the above decision of the Hon'ble Jurisdictional High Court and the Coordinate Bench, we hold that the date of final occupation of the property should be considered for calculation the period of eligibility for deduction u/s 54 of the Act. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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