TMI Blog1992 (12) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... on 144 computing the total income at ₹ 1,48,050. While doing so the Assessing Officer did not allow exemption under section 54(1) of the Act in regarding to capital gains amounting to ₹ 2,40,000 on sale of property at East Patel Nagar sold for ₹ 2,75,000 on 22nd September, 1981, because the Greater Kailash Property claimed to have been purchased was only under an agreement of sale though dated 25th September, 1981 but not under a sale deed being in registered only on 26th February, 1985 beyond statutory period. On appeal, the Commissioner (Appeals) confirmed the assessment order. Hence the instant record appeal by the assessee before us. 3. Learned counsel for the assessee submitted to the effect that : The appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of the authorities below as well as the relevant pages of the paper book to which our attention was drawn and also the case laws relied upon by the parties before us. At the outset it would be relevant to list out the chronological events that took place in the instant case as below : 22nd September, 1981 : Date of sale of property at East Patel Nagar 25th September, 1981 : Date of agreement to purchase flat from Paradise Home Builders the flat being at Greater Kailash April 1982 : Month before which the premises to be delivered, i.e., within 7 months of the payment of the earnest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 54, was synonymous with the word `own' was also answered in negative, i.e., in favour of the assessee. In this connection, it would be most appropriate to extract the relevant portion of the said judgment as hereunder : The word `purchase' is not synonymous with the word `own' and to claim exemption under section 54 one need not become a complete owner of the newly acquired property. It is enough he is in a position to exercise rights in the said property on his own rather than on behalf of the vendor. Further, in common parlance, a person who has paid some money and obtained an agreement regarding an immovable property would be stated to have purchased the property. In the instant case, the assessee had paid major porti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73 ITR 397 (AP) (supra), thus upholding the verdict that the matter had to be decided on the basis as to when the assessee `purchased' the property and not when the property was sold in favour of the assessee, that the expression `purchased' cannotes the domain and control over the property in question into the assessee's hands, that the payment of substantial consideration was paid, that the delay in obtaining formal registration of the sale deed was immaterial to the issue and that, therefore, the assessee was eligible for exemption under section 54(1) of the Act. 8. It may also be further added, as it would be pertinent in the present context, that the decision in the case of Commissioner v. Aravinda Reddy (supra), relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied upon by the Revenue is clearly distinguishable when the provision of law relevant therein is under the wealth-tax pertaining to section 2 whereas the provision of law relevant herein is under the Income-tax Act pertaining to section 54B and particularly that when the assessee therein happens to be the vendor unlike the assessee herein who happens to be the purchaser, and for similar other reasons. 10. Further, the assessee also advanced his arguments that section 2 (42B) defines short-term capital gain as meaning capital gain arising from the transfer or a short term capital asset, and short-term capital asset is defined under section 2(42A) as meaning a capital asset held by an assessee for not more than thirty six months immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta of the Supreme Court in the case cited (supra), and the date of agreement of purchase should be taken as the date of purchase even though conveyance was given after expiry of one year from the date of sale of residential flat, and the mere fact that the major part of the consideration was paid after the expiry of one year would not disentitle the assessee from exemption under section 54. Accordingly, the order of the Commissioner was vacated. 12. A perusal of the aforesaid judgment particularly of the Hon'ble Andhra Pradesh High Court upholding the decision of the Tribunal and of the Hon'ble Supreme Court particularly the former case which is identical with the facts of the instant case would reveal that the issue involved ..... X X X X Extracts X X X X X X X X Extracts X X X X
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