TMI Blog2019 (9) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 - BOMBAY HIGH COURT] after considering the CBDT Circular No.471 dated 15.10.1986 and Circule No.672 dated 16.12.1993 has held that the date of issuance of allotment letter by the builder is the date of acquisition of property. Deduction on four flats purchased by the assessee - the submission of the assessee that all the four residential flats are adjacent flats located on the same floor of the building has not been controverted by the Revenue. In the case of Trilokchand and Sons Vs. ITO 2019 (4) TMI 713 - MADRAS HIGH COURT] has held that so long as the assessee has purchased one more residential house out of the sale consideration for which the liability to the capital gain tax u/s 45 arises, assessee was entitled to deduction thereunder on the entire investment. Hon ble Delhi High Court in the case of CIT Vs. Gita Duggal [ 2013 (3) TMI 101 - DELHI HIGH COURT] has held that the fact that residential house consists of several independent units cannot be the reason for denying the claim of deduction u/s 54/54F of the Act. Purchasing flats in joint name is concerned, it is the assessee s contention that the entire consideration towards the purchase of flats was inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption in respect of investments made before filing of return of income. Assessee is eligible for deduction u/s 54F of the Act. We therefore direct the AO to grant deduction. Thus, the grounds of the assessee are allowed. - ITA No.939/PUN/2016 - - - Dated:- 19-8-2019 - Shri Anil Chaturvedi, AM And Shri Vikas Awasthy, JM For the Assessee : Shri Sanket Joshi. For the Revenue : Shri Rajesh Gawali. ORDER PER ANIL CHATURVEDI, AM : This appeal filed by the assessee is emanating out of the order of Commissioner of Income Tax (A) 9, Pune, dated 29.01.2016 for A.Y. 2011-12. 2. The relevant facts as culled out from the material on record are as under :- Assessee is an individual and stated to be having income from agriculture and other sources. Assessee filed her return of income for A.Y. 2011-12 on 19.03.2013 declaring total income of ₹ 1,27,530/-. The return of income was initially processed u/s 143(1) of the Act. Thereafter, notice was issued u/s 148 of the Act on 24.04.2014 which was duly served on the assessee. Thereafter, the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-assessment proceedings the assessee was asked to justify her claim of deduction in view of the fact that assessee had not filed the return of income within the stipulated period u/s 139(1) of the Act, had not invested the amount in Capital Gain Account Scheme as mandated u/s 54F(4) of the Act. The submissions made by the assessee were not found acceptable to the AO. AO has noted that assessee was asked to produce the documents to justify the four flats purchased by the assessee were used as one single residential house but assessee could not produce any evidence. AO was therefore of the view that assessee had purchased the flats for commercial purpose i.e., giving them on rent. AO also noted that the four flats that were purchased by the assessee were from M/s. Sairaj Builders Developers, which was a partnership firm in which the sons of the assessee were the partners and the flats were purchased in the joint names i.e., in the name of assessee and her son. AO therefore concluded that the purchase of four flats was a decorative transaction to avoid the income-tax. Considering the aforesaid facts, AO denied the claim of deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he word a residential house has been replaced with one residential house is prospective and is only applicable from A.Y. 2015-16 and prior to A.Y. 2015-16, the assessee was eligible to claim deduction u/s 54F of the Act in respect of the adjacent units located on the same floor of the building. 7. With respect to the Revenue s contention that the purchase of flats by the assessee from M/s. Sairaj Builders Developers is a decorative transaction entered into only to avoid the tax, Ld.A.R. submitted that M/s. Sairaj Builders and Developers is a separate legal entity distinguishable from the assessee and its partners. He submitted that assessee had entered into agreement with M/s. Sairaj Builders and Developers, the agreements were registered and assessee had paid substantial amount of stamp duty and registration charges of more than ₹ 6 lakhs for getting the title of the property in her name. He further submitted that section does not put any embargo to the effect that the new house cannot be acquired from a related party. He submitted that no evidence has brought on record by the Revenue to demonstrate that the transactions are sham and was entered into w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the entire cost of the new flat, he relied on the following decisions : i) CIT Vs. Bharati C. Kothari [244 ITR 352 (Cal)] ii) CIT Vs. J.B. Hilla Wadia [216 ITR 376 (Bom)]. iii) Shashi Verma Vs. CIT [224 ITR 106 (MP)]. Ld.A.R. further submitted that the Hon ble Bombay High Court in a recent decision in the case of PCIT Vs. Vembu Vaidyanath in ITA No.1459/2016 dated 22.01.2019 has held that the date of allotment be considered to be the date on which the purchaser of property can be said to have been acquired the property even though the agreement with the builder was executed on later date. 10. With respect to Ld.CIT(A) s reason for rejection of claim that assessee had only paid ₹ 69,14,588/- to the builder upto 31.07.2011 being the due date of filing of return u/s 139(1) of the Act, he submitted that assessee had filed the return u/s 139(4) of the Act on 19.03.2013 though the time limit prescribed u/s 139(4) of the Act was 31.03.2013. He submitted that since prior to the filing of return of income, assessee had utilized the entire sale proceedings for investment for acquisition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for 4 flats purchased by her and not a single flat. (b) The flats were purchased in joint name i.e., of the assessee along with her son. (c) Assessee had purchased the flat beyond the period of two years prescribed under the provisions. (d) Unutilized portion of the amounts subject to capital gains tax was not deposited in capital gain account scheme as mandated u/s 54F(4) of the Act. (e) The purchase of flats by the assessee was from a family firm. The action of AO of denying the claim of deduction was upheld by Ld.CIT(A). With respect to purchase of four flats, it is an undisputed fact that the flats were booked by the assessee vide allotment letter dated 12.07.2011 when the building was under construction. The entire payment for the purchase of flats has been made upto September 2012 i.e., upto the date of filing of return of income. It is Revenue s contention that the assessee had acquired the new asset only when the agreement was entered into on 19.03.2013 i.e., after the stipulated period. We find that recently Hon ble Bombay High Court in the case of Vembu Vaidyanath (2019) 413 ITR 248 (Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epositing the unutilized portion of amount subject to capital gains in capital gain account scheme is concerned, it is fact that assessee had not filed the return u/s 139(1) of the Act but had filed the return of income within the time limit prescribed u/s 139(4) of the Act which was upto 31.03.2013. It is assessee s case that prior to filing of income tax return, assessee had utilized the entire sale proceeds in acquisition of the new residential house. The aforesaid contention of the assessee has not been controverted by Revenue. We find that Hon ble Punjab and Haryana High Court in the case of CIT Vs. Ms. Jagriti Aggarwal (supra) has held that benefit of Sec.54 of the Act is allowable when the assessee has acquired the new asset before filing of return of income. We further find that the Co-ordinate Bench of the Tribunal in the case of Ramarao Dhondiba Pimple Vs. ITO (supra) after considering the decisions of Hon ble Gauhati High Court in case of CIT Vs. Rajesh Kumar Jalan reported in 286 ITR 274 and CIT Vs. Ms. Jagriti Aggarwal (supra) and the decision of Hon ble Bombay High Court in the case of Humayun Suleman Merchant Vs. CCIT (supra) has held that assessee is eligible to cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier. Such being the situation, it is the case of the respondent/assessee that the respondent/assessee could fulfil the requirement under s. 54 of the IT Act for exemption of the capital gain from being charged to income-tax on the sale of property used for residence upto 30th March, 1998, inasmuch as the return of income-tax for the asst. yr. 1997-98 could be furnished before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier under sub-s. (4) of s. 139 of the IT Act, 1961. 10. The Hon'ble Punjab Haryana High Court in the case of CIT Vs. Ms. Jagriti Aggarwal (supra.) while considering the issue, whether the assessee is eligible for claiming benefit of exemption u/s. 54, if capital gain amount is deposited/invested after due date of furnishing return of income u/s. 139(1) but before the due date of furnishing return of income u/s. 139(4) held : 10. Having heard learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectively. 11. The Hon'ble Punjab Haryana High Court in another case CIT Vs. Jagtar Singh Chawla reported as 33 taxmann.com 38 following the ratio laid down in the case of Rajesh Kumar Jalan (supra.) allowed assessee s claim of exemption u/s. 54F where the assessee paid substantial amount of sale consideration for residential house within extended period of filing return of income u/s. 139(4) of the Act. 12. In the case of Humayun Suleman Merchant Vs. CCIT (supra.), we find that the Hon'ble Bombay High Court has not disapproved the ratio laid down in Rajesh Kumar Jalan case. However, the assessee s claim of exemption u/s. 54F was rejected therein as the ratio laid down in Rajesh Kumar Jalan s case was not applicable on the facts and circumstances of that particular case. Relevant extract of the findings and observation of Hon'ble Jurisdictional High Court reads as under: (v) Lastly and in the alternative, it is submitted by Mr. Chatterji, that as the entire amount has been paid to the developer/builder before the last date to file the return of Income under Section 139 of the Act, the exemption is available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant had complied with the Section 54F(4) of the Act. 13. In the present case, the assessee has claimed exemption u/s. 54B of the Act. We observe that the provision of sub section (2) of Section 54, provision of sub section (2) of section 54B and provisions of sub section (4) of Section 54F are perimeteria. The judgments on which the ld. AR has placed reliance are rendered with reference to claim of exemption u/s. 54/54F. Since provisions of sub section (2) of section 54 and 54B and (4) of section 54F are identical, therefore, ratio laid down by the various Hon'ble High Courts would apply to provisions of section 54B (2) as well. Thus, in the light of facts of the case and various decisions as discussed above, we find merit in ground No. 1 raised by the assessee in appeal and the same is accepted. The assessee is eligible to claim exemption u/s. 54B in respect of investment made towards purchase of agriculture land within the time limit for filing return of income specified under section 139(4). Before us, Revenue has not pointed to any contrary binding decision in its support. In view of the aforesaid facts and relying on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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