TMI Blog2019 (3) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... nied to the assessee. The assessee has done all what he could have done. There is no failure on the part of the assessee. We are of the considered opinion that CIT(A) was not justified in denying the exemption claimed by the assessee under section 54 and direct the assessing officer to delete this addition. Disallowance of exemption in respect of amount deposited by the assessee in the capital gain account on the ground that the same was not utilised within the period of three - HELD THAT:- The delay in the present case was on account of the developer and not on account of the assessee. The assessee had deposited the amount in capital gain account. The balance amount could not be utilised as there was a dispute and stay by the National Disputes Redressal Commisison. Accordingly, for the reasons stated hereinabove, we hold that the CIT(A) was not justified in confirming the action of the Assessing Officer and direct the AO to delete this. Even if the amount deposited by the assessee in the capital gain account scheme is to be charged to tax, then it could be taxed only after the expiry of the prescribed period not in the year to which the capital gain pertains to. The addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady made substantial payment for a residential house. 4. That the CIT (A) has erred in law and on facts in confirming the disallowance of ₹ 19,00,000/- made by an AO on account of nonutilisation of amount for the new asset within the period mentioned in sub section (1) of Section 54 of the Act when the same were utilised for the residential house. 5. Without prejudice, the CIT(A) has failed to appreciate that an amount of ₹ 10,60,311 was utilised for construction of the new asset. 6. That the AO and subsequently the CIT(A) has erred in law and on facts in taking the amount of ₹ 2,00,000/- as cost of acquisition for calculation of indexed cost of acquisition against the ₹ 2,20,450/-. 7. That the AO and subsequently the CIT(A) has erred in law and on facts in making a disallowance of ₹ 52,867/ on account of cost of improvement incurred in year 2010-11. 8. That the CIT(A) has failed to appreciate that on the facts and circumstances of the case, the various observations and findings of the learned assessing officer in the impugned assessment order are irrelevant and vitiated in the law. 9. That on the facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal before the Tribunal. 3. The assessee has raised as many as 12 grounds in this appeal, but the issues involved therein are only with respect to addition of ₹ 62,68,311/- on account of capital gains, as the assessee did not fully comply with the conditions u/s. 54F of the Act, addition of ₹ 19,00,000/- on account non-utilization of amount in the new asset within the statutory period, addition of ₹ 20,450/- by taking the indexed cost of property at ₹ 2,00,000/- instead of ₹ 2,20,450/- and addition of ₹ 52,867/- on account of disallowance of cost of improvement claimed to have been incurred during the year under consideration. 4. Regarding disallowance of exemption of ₹ 62,68,311/- claimed u/s. 54F of the Act in respect of investment in the residential flat, the ld. AR of the assessee submitted that both the authorities below have erred in not allowing the exemption claimed. It was submitted that during the year under consideration, the assessee sold a property, Plot No. 116, Sharda Niketan, Pitampura, Delhi. The said property was sold for a total consideration of ₹ 98,00,000/- and claimed exemption u/s 54 of the Act, by investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopers and had made frantic efforts for claiming possession of the said flat. However, there was delay on part of the developers against whom La Tropicana Resident Welfare Association filed a complaint before National Consumer Disputes Redressal Commission seeking relief from the unfair trade practices of the developers. It is submitted that assessee had bona fide intentions of investing the property and claiming the exemption u/s 54. But due to the complaint filed against Parsvnath Landmark Developers Pvt. Ltd., the developer and delay in receiving the possession was beyond the control of the assessee, and the assessee was restricted to pay further amount in the property with them. It was further contended by the Ld. AR that the AO has not doubted the payments made by the assessee which has been made through proper banking channels. The delay is by reason beyond the control of the assessee. Similar issue has come up before various courts where it is held that exemption under section 54 cannot be denied in case possession is not granted or purchase deed is not executed by reason beyond the control of the assessee. The Ld. AR placed reliance on the judgment of Hon ble Delhi Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll what he could have done. There is no failure on the part of the assessee. Our above view is supported by judgment of the Hon ble Delhi High Court in the case of Balraj vs CIT 254 ITR 22 wherein a similar issue of purchase deed having not been executed had come up for consideration and the Hon ble Court after analyzing the facts and provision of section 54 has held as under: For the purpose of attracting the provisions of section 54 of the Income-tax Act, it is not necessary that the assessee should become the owner of the property. Section 54 of the said Act speaks of purchase. Moreover' the ownership of the property may have different connotation in different statutes. The question which arises for consideration appears to be squarely covered by a decision of the apex court in CIT v. T. N. Aravinda Reddy [1979] 120 ITR 46, where it has been held that 'the word 'purchase' occurring in section 54(1) of the Act had to be given its common meaning, viz., buy for a price or equivalent of price by payment in kind or adjustment towards a debt or for other monetary consideration. Each release in this case was a transfer of the releasor's share for consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional High Court, we are of the considered opinion that CIT(A) was not justified in denying the exemption of ₹ 62,68,311/- claimed by the assessee under section 54 and direct the assessing officer to delete this addition. 8. On the issue of disallowance of exemption of ₹ 19,00,000/- in respect of amount deposited by the assessee in the capital gain account on the ground that the same was not utilised within the period of three years, the ld. AR of the assessee submitted that during the year under consideration, assessee had deposited an amount of ₹ 19,00,000/- in Capital Gain account Scheme with State Bank of India, Chandni Chowk, Delhi. The bank statement of the account is placed at PB Page 76-77, the benefit of which was not given to the assessee. It was further submitted before us as also before the Ld. AO that assessee had paid further an amount of ₹ 10,60,311/- on 01.06.2013 to M/s Parsvnath Landmark Developers Pvt. Ltd. which is evident from the bank statement placed at Paper book Page 81-82, the benefit of which was not given to the assessee. However, the assessee could not utilize the balance amount of ₹ 8,39,689/- as the National Consumer D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. In view of the aforesaid provisions, it is clear that even if the amount deposited by the assessee in the capital gain account scheme is to be charged to tax, then it could be taxed only after the expiry of the prescribed period not in the year to which the capital gain pertains to. In view of the above the addition made by the Ld. AO and sustained by the Ld. CIT(A) deserves to be deleted. 11. Regarding addition of ₹ 20,450/-, it was submitted that the Assessing Officer has not taken into consideration a sum of ₹ 20,450/- being expenses incurred by the assessee at the time of purchase of property. It was argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, the benefit of which was not given to the assessee, which is allowable as per section 55 of the Act. Since the property was constructed long back and the additional cost of improvement was genuinely incurred, just for want of specific documentary evidences, the Assessing Officer cannot reject it where it has been expressly submitted that said cost was incurred in year of acquisition of land. Even the AO and CIT(A) has confirmed the addition merely on the ground that proofs were not submitted. No personal visits were made by the AO or CIT(A) to know whether there is said construction or not. Therefore, the said addition made by the Ld. AO and sustained by the Ld. CIT(A) is liable to be deleted. 15. The ld. DR, on the other hand, supported the order of the AO and submitted that in the absence of any evidence, the AO was justified in ignoring the claim of the assessee. 16. Having considered the rival submissions we find that the facts of this issue are identical to the issue of disallowance of cost of improvement dealt by us above wherein we have upheld the action of the Assessing Officer in ignoring the expenses in the absence of any evidence. Here also, in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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