TMI Blog2019 (3) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Commissioner (Appeals) in this regard. Having held so, now it is necessary to examine whether the investments made by the assessee in the new assets (flats) would qualify for deduction u/s 54 of the Act. AO while disallowing assessee’s claim has observed that mere letters issued by the real estate development company allotting flats to the assessee does not confer ownership rights, hence, assessee cannot be considered to be the owner of the flat to claim deduction. However, in our considered opinion, once the assessee makes investment in purchase of flats and flats are allotted in its name, the conditions of section 54 of the Act are satisfied. The materials placed on record clearly prove that not only the flats were allotted to the assessee in the impugned assessment year but the sale deeds relating to the flats purchased were executed and registered in favour of the assessee before the end of the financial year relevant to the assessment year under dispute. That being the case, the investments made by the assessee in purchase of flats is within the period prescribed under section 54(1) of the Act. Therefore, the assessee is eligible to claim deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o claim deduction since on the date of transfer of Dhruv Malad Building, the assessee was owner of more than one residential house other than the new asset. Further, the Assessing Officer observed, insofar as the investment in new asset (flats) are concerned, the assessee has only received the allotment letter from the real estate development company. He observed, complete rights in the property vests with the owner only when he receives possession of the said property. Thus, on the aforesaid reasoning, the Assessing Officer ultimately rejected assessee s claim deduction both under section 54 as well as section 54F of the Act. Being aggrieved, the assessee preferred appeal before the first appellate authority. 4. Before the learned Commissioner (Appeals), the assessee reiterated its claim of deduction under section 54 of the Act in respect of capital gain arising from transfer of Dhruv Malad Building. It was submitted by the assessee, since the asset transferred was a residential house and the capital gain derived from transfer of such asset is invested in purchase of another residential house, it is eligible to claim deduction under section 54 of the Act. Further, it was submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of capital gain in new residential house is section 54 of the Act. He submitted, merely because due to ignorance of law the assessee claimed the deduction under a wrong provision i.e., section 54F of the Act, the Assessing Officer cannot take advantage of the same. He submitted, in course of assessment proceedings itself the assessee has revised its claim of deduction from section 54F to section 54 of the Act. He submitted, assessee s claim of deduction under section 54 of the Act being bonafide and in accordance with the statutory provision, learned Commissioner (Appeals) has rightly allowed assessee s claim of deduction under section 54 of the Act. As regards the investment of capital gain in new flats and assessee s ownership over the flats, learned Authorised Representative drawing our attention to the copies of the allotment letters placed in the paper book submitted, the assessee had invested the capital gain in the new flats within the period prescribed under section 54 of the Act. He submitted, flats were allotted to the assessee on 15th March 2013. He submitted, the final sale agreements were also executed and registered before the end of the impugned financial year i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer of residential house, section 54F of the Act applies to long term capital gain arising from sale of assets other than residential house. In the facts of the present case, there is no dispute that capital gain arises from transfer of a residential house. That being the case, if the assessee invests the capital gain in purchase/construction of a new residential house, it is eligible to claim deduction under section 54 of the Act. Merely because the assessee, by ignorance of law or mistake, has claimed deduction under section 54F instead of section 54 of the Act, such ignorance of law/mistake on the part of the assessee cannot be utilized to its disadvantage by the Assessing Officer. The duty of the Assessing Officer is to correctly compute the real income of the assessee in accordance with the statutory provisions. While the Assessing Officer is empowered to disallow any deduction claimed by the assessee if it is not in accordance with provisions of Act, in the same manner, he is duty bound to allow deduction to the assessee if the assessee is eligible for such deduction under the provisions of the Act. Therefore, in the facts of the present case, since the capital gain arises fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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