TMI Blog2019 (1) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... hin six months period. By virtue of Section 2(47) (v) of the Act transfer is complete when the possession of immovable property is given in part performance falling within Section 53A of the Transfer of Property Act, 1882. Coming to the question whether assessee could claim such exemption over investment done over two successive financial year, this stands answered by Hon’ble Jurisdictional High Court in the case of Coromandel Industries Ltd [2014 (12) TMI 852 - MADRAS HIGH COURT] as upheld the view of this Tribunal that investments, even though they are made in two difference financial years, if they fall within six months period from the date of transfer, would be eligible for deduction under Section 54EC - Decided in favour of assessee Disallowance of additional cost of construction while computing the deduction claimed under Section 54 - Held that:- AO sought restriction of the additional claim of ₹ 12,21,086/- based on certain submissions given by M/s.Sumanth& Co. It appears that he did not verify whether the claim of the assessee was genuine. Ld. AO also did not verify whether there was any duplication of original claim of ₹ 3,18,75,000/- under Section 54 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty, including signing of plans, applications etc. The Chennai Metropolitan Development Authority (CMDA) issued planning permit for the building on 31.12.2013. As per the assessee, vacant possession of the property was handed over to M/s. Sumanth and Company on 03.02.2014. In the return of income filed for the impugned assessment year assessee admitted capital gains arising out of the above transaction, but claimed deduction of ₹ 1 Crore u/s.54EC of the Act on such capital gains. This claim was on the investment in Electrification Corporation Bonds of ₹ 50 lakhs each on 28.02.2014 and 30.06.2014. Ld. Assessing Officer was of the opinion that investments made by the assessee in the Bonds were beyond the period of six months from the date of transfer, giving rise to the capital gains. According to the ld. AO, transfer had appeared on 15.04.2013, when assessee entered into JDA with M/s.Sumanth and Company. The investments as per the ld. AO, ought have been made by the assessee before 15.10.2013. Thus, according to him, investments in Electrification Corporation Bonds made on 28.02.2014 and 30.06.2014 were beyond the period allowed u/s.54EC of the Act and not eligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2014 and the six months period had to be construed from this date. Clauses 5, 8,9 and 12 of the JDA dated 15.04.2013 which are apposite is reproduced hereunder:- 5. The owner agrees to deliver vacant possession of the Said Property on receipt of plan sanctions from CMDA. 8. The Owner agrees to entrust the Said Property to the Developer for the purpose of demolition of the existing building and structure at the Developers cost after receipt of approval for the said purpose and sanction of building plans from CMDA and all other concerned authorities and on payments of all amounts as contemplated under clause 4(f). The net proceeds of the demolition shall accrue to the developer. 9. The developer shall commence demolition only after obtaining the necessary demolition sanction and the approval of plan from CMDA and on making payments contemplated in clause 4(f) above. The Developer shall at all times, keep the owner indemnified of any and every action or claim by any government authorities or local body in respect of the development of the property. The developer shall not deviate in any manner from the sanctioned plan/s in the construction of the building complex and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Jurisdictional High Court in the case of Coromandel Industries Ltd (supra). Their Lordships had upheld the view of this Tribunal that investments, even though they are made in two difference financial years, if they fall within six months period from the date of transfer, would be eligible for deduction under Section 54EC of the Act. Hence, we are of the opinion that assessee was eligible to claim deduction u/s.54EC of the Act. Disallowance of such claim is set aside. Grounds 2 and 3 are allowed. 7. Through its grounds 4 to 7, grievance of the assessee is that ld. CIT(A) did not allow a claim of additional cost of construction of ₹ 3,06,40,581/-, while computing the deduction claimed under Section 54 of the Act. 8. Ld. Counsel for the assessee submitted that assessee in the return of income filed for the impugned assessment year claimed deduction under Section 54F of the Act as under:- U/s.54 (Investment in acquisition of another residential property) to be constructed by the developer in the assessees share of UDSL retained by him :9,375,000 Cost of Additional construction for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ld. DR was beyond preponderance of probability. 10. We have considered the rival contentions and perused the orders of the authorities below. What we find is that assessee had made a claim under Section 54 of the Act in its return of income, and this included cost of the flat to be constructed by the developer, additional payments which were to be made to the developer and deposit made in the capital gain scheme, altogether aggregating to ₹ 3,18,75,000/-, and this claim was allowed by the ld. AO in the assessment. However, assessee chose to stake a further claim of ₹ 3,06,40,581/- before ld. CIT(A) with supporting records. Ld. CIT(A) despite noting that it was a fresh claim, admitted the additional evidence and referred it to the ld. AO for a remand report. What was stated by the ld. AO in the remand report is reproduced hereunder:- Please refer to the above. The following issues are examined and submitted herewith. (i) Whether the assessee has raised the above issue before the Assessing Officer during the course of the assessment proceedings, if yes, why the same was not considered by the AO. Yes and it was considered during the course of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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