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2019 (6) TMI 244

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..... dated 29/12/2017 passed by CIT(A)-11, New Delhi for Assessment Year 2015-16. 2. The grounds of appeal are as under:- 1. That, on the facts and circumstances of the case and the provisions of law, the order passed by the Learned Assessing Officer under section 143(3) is erroneous, arbitrary, without application of a judicial mind, and bad in law. 2. That, on the facts and circumstances of the case and the provisions of law, the Learned AO erred in rejecting the claim for deduction of Rs. l,08,58,660/- u/s 54F. 3. That, on the facts and in the circumstances of the case the Learned AO completely overlooked the fact that section 54F is a beneficial provision which requires to be interpreted in a liberal manner, particularly in a case where the Appellant had established its bonafide. 4. That, on the facts and in the circumstances of the case the Learned AO erred in ignoring the fact that the possession and title deeds of the Okhla property was handed over to the buyer on 5.10.2013 itself in part performance of the Moll, while the purchase deed for the Lucknow house was entered on 10.10.2013. 5. That, on the facts and in the circumstances of the case the Learned AO erred in ignoring the .....

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..... F (₹ 1,08.58.660/-). The Ld. AR filed the following details: (i) Capital gains arising on Sale of industrial property at Okhla Sale price of Okhla Property 2,60,00,000/- Brokerage paid 2,60,000/- Net sale consideration 2,57,40,000/ Less: indexed cost of acquisition 71,56,149 Long Term Capital Gain 1,85,83,851 Less deduction u/s 54EC 50,00,000/- Net Long Term Capital Gain (as determined by AO. Page 37 of Paper book) 1,35,83,851/- (ii) Date of transfer of Okhla Property: Event Date MOU for sale of Okhla property for total consideration of ₹ 2.60 crore entered with the buyers 31.05.2013 Possession and title documents handed over to buyers against receipt of advance payments totaling ₹ 1.75 crore (through 7 cheques between 31.05.2013 and 20.08.2013) 05.10.2013 Conversion of leasehold title to freehold title by DSIDC 19.03.2015 Sale deed for Okhla property registered 26.03.2015 (iii) Purchase and construction of new residential house at Lucknow: Event Date/Amount Purchase deed for Lucknow property executed on 10.10.2013 Purchase consideration paid by Appellant: (₹ 10,00,000/- on 01.08.2013, ₹ 69,20,000/- on 7/10/2013, and TDS ₹ 80,000/- on 10.10.2013) .....

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..... 18/10/1993 9. CIT(A) Vs. Bharti Mishra [2014] 41 Taxmann.com 50 (Delhi) 10. CIT(A) Vs. Kuldeep Singh [2014] 49 taxmann.com 167 (Delhi) 11. Narasimha Raju Rudra Raju Vs. ACIT [2013] 35 taxmann.com 90 (Hyderabad-Trib.) 12. Smt. V. A. Tharabai Vs. DCIT [2012] 19 taxmann.com 276 (Chennai-Trib) 13. ITO Vs. Narayana Rao [2017] 83 taxmann.com 73 (Hyderabad- Trib.) The Ld. AR further submitted that the assessee had transferred possession of Okhla property and its title documents on 05.10.2013 against receipt of advance sale consideration of ₹ 1.75 crore. Therefore, in terms of definition of Transfer in Section 2(47)(v) of the Act the transfer of Okhla property took place on 05.10.2013. For this reason also purchase of Lucknow property on 10.10.2013 and construction of an additional floor thereupon till 30.03.2015 was within the time limit permitted u/s 54F(1) read with Section 2(47)(v). 6. The Ld. DR submitted that the Assessing Officer in assessment order observed that during the year under consideration the assessee has shown the gross total income of ₹ 42,63,000/- comprising of income from capital gains at ₹ 27,25,191/- at income from other sources at ₹ 15,38,40 .....

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..... ction. 7. We have heard both the parties and perused the material available on record. The CIT(A) held as under:- 5.3. I have considered the facts of the case and the submission made by the AR. It is contended that the appellant had entered into an MOU for sale of property on 31.05.2013 and had handed over the possession of the original asset to the buyer on 05.10.2013 and therefore, the property can be said to has been transferred on that date, in accordance with the provisions of section 2(47)(v) of the Act. It is further contended that if the date of registered sale deed is to be considered as the date of transfer, in that case also, deduction u/s 54F should be allowed as the construction of the new property was completed on 30.03.2015 which is within the period of three years from the date on sale deed. It is further contended that the appellant had purchased a residential house on 10.10.2013 for ₹ 87,23,200/- and had subsequently, constructed a floor by making an investment of ₹ 21,35,460/- and the said construction is claimed to be completed on 30.03.2015. 5.3.1. On perusal of the documents furnished by the AR, it is observed that the appellant had entered into an .....

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..... e with the provisions of section 2(47) of the Act only on 26.03.2015 and the appellant has not purchased the new house within the stipulated time of one year prior to the date of transfer of original asset and the deduction u/s 54F of the Act is not available for making renovation to the old house which was purchased before the date of transfer of original asset. Accordingly, the addition made by the AO by disallowing deduction u/s 54F of the Act is upheld and the grounds of appeal are dismissed. From the records, it can be seen that the assessee did not purchase new house within the stipulated time of one year prior to the date of transfer of original asset as per the requirement while claiming deduction u/s 54F. Besides this renovation to old house which was purchased before the date of transfer of original asset will not entitle the assessee to claim deduction u/s 54F of the Act. It is pertinent to note that the decisions relied upon by the Ld. AR will also not support the case of the assessee as in assessee s case the purchase of new house was on 10.10.2013 while sale deed of Okhla Property was executed on 26.03.2015. Thus, the CIT(A) was right in dismissing the appeal of the a .....

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