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TMI Blog2018 (8) TMI 1309X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant and held that the capital gains on sale of Flat No.302, BUTTERCUP, Hiranandani Meadows situated at Thane, West Mumbai resulted in long term capital gains when the appellant was eligible to get the deduction u/s.54(1) in respect of the investment made in the apartment at "Sapphire Heights", the appellant having satisfied all the conditions. 5. On the facts the learned CIT(A) ought to have appreciated the explanation and refrained from treating the capital gains as short term capital gains by declining the benefit u/s.54 of the Act. 6. Without prejudice, the addition is excessive, arbitrary and unreasonable and liable to be deleted in toto. 7. The learned Assessing Officer erred in levying the interest u/s.234A and 234B of the Act. 8. For these and other grounds that may be urged at the time of hearing of the appeal the appellant prays that the appeal may be allowed. 2. Ground Nos. 1 to 3 relate to the validity of the reopening of the assessment under section 147 of the Act. During the course of hearing, the learned Counsel for the Assessee has contended that original assessment was framed under section 143(3) of the Act in which the AO has allowed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded, the AO has categorically stated that in the order under section 143(3) passed on 28.03.2013, the AO has computed the long-term capital gain and allowed the exemption under section 54 of the Act and taxable long terms capital gain being Nil. However, it was seen from the sale deed that Assessee has declared long term capital gain of Rs. 18,66,239/- from the sale of flat No. 302, BUTTERCUP, Hiranandani Meadows, on 28.06.2009. On perusal of sale deed, the AO observed the said property was registered in the name of the assessee vide sale deed dated 06.03.2009 against payment of Rs. 29,08,950/- and was sold on 28.06.2009 for Rs. 62,92,500/- as the asset is held for less than 3 years, the same is to be assessed as short-term capital gain. All these aspects were not examined by the AO in the original assessment proceedings. Therefore, we are of the view that reopening is valid and it does not amount to change of opinion. We accordingly hold the reopening of the assessment and confirm the order of the CIT(A) in this regard. 5. The other ground in this appeal relate to the claim of deduction under section 54 of the Act. In this regard, the facts in brief borne out from the record are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009, on page-14 pare 13, the possession of the flat is taken on the date of purchase i.e. 06-03-2009. On the date allotment as claimed i.e. 22-02-2006, the possession was not given and the flat was not ready to occupy - it was in the pre construction stage. 2). As could be seen from page 7 of the purchase deed it is clearly mentioned that the Thane Municipal Corporation has granted the promoters Development Permission/Commencement Certificate for construction of multi-storied buildings, for construction and sale of flats/shops/office premises/garage vide commencement certificate No. V.P. No. 2003/07/TMC/TDD-539 dated 17.11.2006. As claimed by the assessee that the date of allotment should be taken as the date of acquisition, in the instant case, even the permission to commence the apartment has been issued by the Thane Municipal Corporation only on 17-11-2006, whereas the assessee's claim is to take the date as 22-02-2006. 3) On the page No.7 of the purchase deed it is mentioned that the Architect of the promoters has also issued a Certificate dated 21-11-2006 stating that the building No.3 referred- to in the--Commencement Certificate issued by the -Thane Municipal Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of another apartment called "Sapphire Heights" in Mumbai through registered agreement dated 29-07-2009 for an agreed consideration of Rs. 71,58,750/-. Hence, the gains arising out of the sale of the apartment at Flat No. 302, Buttercup, Hiranandani Meadows, Thane, Mumbai, is brought to tax as short term capital gains and --it computation is shown as under: Penalty proceedings U/s.271(1)(c) of the Act initiated for concealment/furnishing inaccurate particulars of income. Sale consideration received 28-06-2009 : Rs.62,91,500/- LESS: Cost of acquisition on 06-03-2009 : Rs.29,08,950/- Short Term Capital Gains Rs.33,82,550/- 7. Aggrieved, assessee has preferred an appeal before the Tribunal and during the course of hearing, the learned Counsel for the assessee emphatically argued that the impugned flat was allotted to the assessee on 22.02.2006 through the allotment letter dated 22.02.2006. Therefore, the property was acquired on 22.02.2006 which was later on sold on 29.06.2009 after holding the capital asset for more than 3 years. Therefore, the long term capital gain was rightly computed by the assessee. In support of his contention, he placed reliance upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inable in the eyes of law. He has also placed reliance upon the following judgments: 1. CIT Vs. Balbir Singh Maini [2017] 86 taxmann.com 94 (SC). 2. Shri. M. C. Satyanarayana Gowda Vs. ITO, Ward - 5(4), Bangalore in ITA No. 1057/Bang/2016 dated 26.02.2018 3. CIT Vs. Jumramal Sons (1986) 25 Taxman 242 (All). 4. Home Finders Housing Ltd., Vs. ITO (2018) 94 taxmann.com 84 (SC) 5. Pr. CIT, Vadodara-2 Vs. Sun Pharmaceutical Industries Ltd., (2017) 79 taxmann.com 61 (SC) 6. Pr. CIT, Vadodara-2 Vs. Sun Pharmaceutical Industries Ltd., (2017) 77 taxmann.com 53 (SC) 7. Jivraj Tea Co. 377 ITR 337 (Gujarat) 9. Having carefully examined the order of authorities below in the light of rival submissions, we find that assessee has simply booked the flat by making the payment of Rs. 1,00,000/- to the builder on 22.02.2006, thereafter the remaining payment was got financed financed by the builder from the financer ICICI Home Finance Co. Ltd. It is also evident from the sale agreement executed between the appellant and the builder that the Development Permission/Commencement Certificate was granted by the Municipal Corporation on 17.11.2006 meaning thereby upto17.11.2006, even th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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