TMI Blog2014 (9) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gain on this basis and therefore, he is entitled for the exemption to the extent of the investment made in the purchase of new asset. - Decided in favor of assessee. - ITA No.467/Bang/2013 - - - Dated:- 26-9-2014 - Shri Rajpal Yadav, Judicial Member and Shri Jason P. Boaz, Accountant Member For the Appellant : Shri Ramasubramaniyam, CA For the Respondent : Shri Bijoy Kumar Panda, DR ORDER Per Rajpal Yadav, J.M. The assessee is in appeal before us against the order of the learned CIT (A), dated 28.02.2013 passed for assessment year 2009-10. The grounds of appeal taken by the assessee are not in consonance with Rule 8 of the ITAT Rules, they are descriptive and argumentative in nature. In brief, the grievance of the assessee is that, the learned CIT (A) has erred in confirming the denial of exemption u/s 54 of the Income Tax Act in respect of Long Term Capital Gain of ₹ 10,66,400/-. 2. The brief facts of the case are that the assessee is an individual. He has filed his return of income for assessment year 2009-10 on 28.08.2009 declaring total income of ₹ 5,66,860/-. The case of the assessee was selected for scrutiny assessment. A notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- was paid within a period of one year prior to sale of house property. The learned CIT (A) had called for a remand report from the Assessing Officer and the Assessing Officer has agreed to this extent. The observation of the learned CIT (A) read as under: 4.1 The Assessing Officer erred in law in denying the exemption u/s 54 of the Act in respect of long term capital gains of ₹ 45,92,000/-. 4.2 The Assessing Officer erred in law in taxing the sum of ₹ 45,92,000/- being the long term capital gains at normal rate interest of 20% as per section 112 of the Act. 5. The Assessing Officer in the remand report dated 18.02.2013 has intimated as follows: In connection with the report called for, I bring the following facts for the kind consideration of the CIT (A). During the previous year, the assessee has sold an immovable property consisting of land and residential house. The assessee is eligible for exemption u/s 54EC and 54 of the Act. In the return filed the assessee has claimed exemption u/s 54EC of ₹ 18.00 lakhs out of the capital gain of ₹ 63,00,209/-. If this is reduced the balance is ₹ 45,00,209/-. The Assessing Officer could not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond one year prior to the sale of the house is not to be considered as used for the purchase of the new asset, because at that point of time, no capital gain was accrued to the assessee, meaning thereby the capital gain on sale of the house property was not used for the purchase of the new asset. To this extent, assessee cannot claim exemption u/s 54 of the Income Tax Act. For buttressing his contentions, he relied upon the order of the decision of the Hon'ble Delhi High Court in the case of Vipin Malik (HUF) vs. CIT reported in 183 Taxmann 296/330 ITR 309. He also relied upon the order of the ITAT in the case of Milan Sharad Ruparel vs. ACIT reported in 27 SOT 61 (Mum) and in the case of Smt. Kumuda vs. DCIT reported in 18 Taxmann.com 265/135 ITD 116. 5. We have duly considered the rival contentions and gone through the record carefully. On a perusal of section 54, we are of the view that exemption u/s 54 on utilization of capital gain for purchase of a residential house or construction of a residential house is being given in sub-section 1. Sub-section 2 provides a mechanism if the capital gain was not appropriated by the assessee towards the purchase of the new asset wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vipn Malik (HUF) and flat was not purchased in the name of HUF, rather it was in the name of Vipin Malik. Thus, this authority in a way goes in favour of the assessee in the present case. It is not for the proposition that benefit u/s 54 would be given only to the extent the investment was made out of the same amount of the capital gain resulted to the assessee. We are not concerned when the payments were made, because mere payments do not entitle an assessee to say that he has acquired the property. The appointed date is the date when the transaction of purchase is to be considered as a transfer within the meaning of section 2(47) between the assessee who claims exemption u/s 54 and the vendor who has sold the property namely the new asset. In the present case, the new asset can be termed to be acquired either in May, 2008 when possession was given to the assessee or 15.10.2009 when ultimate deed was registered in favour of the assessee. The transfer as per section 2(47) for purchase of the new asset would be considered as taken place in May, 2008 or 15.10.2009, it cannot be considered from the date when the assessee merely agreed to purchase a flat with L T. The Hon'ble De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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