TMI Blog2020 (7) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... entire amount of capital gain utilized for purchase of residential property. Consequently, the appeal of the assessee is allowed and the appeal of Revenue is dismissed. - ITA No.1501/Del./2019 - - - Dated:- 21-7-2020 - Shri Bhavnesh Saini, Judicial Member And Shri O.P. Kant, Accountant Member For the Appellant : Ms. Gunjan Jain, CA For the Respondent : Shri R.K. Gupta, Sr. DR ORDER PER O.P. KANT, AM: The assessee has preferred this appeal against the order dated 24/12/2018 passed by the Ld. Commissioner of Incometax (Appeals), Faridabad [in short the Ld. CIT(A) ] for assessment year 2011-12, raising following grounds of appeal: 1. Under the facts and circumstances of the case, the Ld. Assessing Authority and Ld. First Appellate Authority have grossly erred in not allowing the claim of exemption in terms of section 54 amounting to ₹ 5,99,244/-of the Act in respect of Long term capital gain arising on sale of residential flat at Varsova (Mumbai) against the purchase of new residential property made during the year, which is grossly injudicious, unwarranted against the facts and bad at law. Tax Effect relating to above mentioned groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith other co-owners. The assessee has bifurcated the sale consideration into two components. One component is of ₹ 1,02,57,406/- towards sale consideration for the land and ₹ 16,42,594/- towards sale consideration for the constructed part. The assessee also claimed deduction against long-term capital gain of ₹ 21 lakh i.e. the amount which was retained by the buyer due to house tax dispute. The Learned Assessing Officer did not allow the deduction of ₹ 21 lakh while computing the long-term capital gain. He also did not allow the cost of the construction of the flat against short-term capital gain on the ground that no such cost was incurred by the assessee. The claim of the assessee for deduction under section 54 of the Act was also denied on the ground that no such claim was made in the return of income and the assessee already owned residential house at the time of the investment in the residential house claimed for deduction under section 54 of the Act. On further appeal, the Ld. CIT(A) dismissed the claim under section 54 of the Act on the ground that assessee had not raised any ground of the appeal or additional ground before him and assessee also fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO for deciding afresh. 4. On the other hand, the Learned DR also appeared through videoconferencing and relied on the order of the lower authorities but did not object for restoring the matter back to the Assessing Officer for deciding afresh. 5. We have heard the rival submission of the parties and perused the relevant material on record. On perusal of the development agreement available on pages 39 to 58 of the paper book, we find that the land in question was owned by many other co-owners other than the three co-owners i.e. the assessee, Sh Saurabh Jain and Usharani. The owners of the land had started work in the towers A and B, but work was stopped after second slab and thereafter, they entered into agreement with the developer for construction of the tower A upto 9 floors. The developer agreed to complete the construction work of the said tower and was entitled for few floors of the tower. The development agreement has provided details of various floors which were assigned to the developer and owners of the land. The assessee along with other two co-owners were assigned second floor of the tower, which the assessee has sold along with the co-owners. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is: Whether the assessee is eligible for claiming exemption u/s 54F in respect of residential flat / house for which the assessee has entered into an agreement for purchase more than one year before the date of transfer of capital asset ? The dates qua, transfer of capital asset, execution of agreement for purchase of residential flat and possession of the flat are not in dispute. 7. The contention of the assessee is that since final consideration was paid and the possession of flat was received within a period of one year prior to the date of transfer of capital asset, the same should be considered as the date of purchase. Whereas, the stand of Department is that the date of execution of agreement for purchase of flat should be considered as the date of purchase. 8. The ld. A.R. has drawn our attention to Clause (12) of the deed of agreement between the assessee and the builder for purchase of flat. The said clause is reproduced herein below : 12. Nothing contained in this Agreement shall be construed to as to confer upon the Purchaser any right whatsoever into or over the said property or the said new building or any part thereof including the said pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date on which the transfer took place, purchased a residential house, the capital gain shall be dealt with as provided in that section. As per the section certain exemption has to be allowed in respect of the capital gains to be calculated as set out therein. The Department contends that the assessee did not purchase the residential house either one year prior to or two years after the sale of the capital asset which resulted in the long-term capital gains. According to the Department, the agreement for purchase of the new flat was entered into more than one year prior to the sale. Hence, petitioner is not entitled to the benefit under section 54F. In our view, the Tribunal has rightly negatived this contention and has held that the new residential house had been purchased by the assessee within two years after the sale of the capital asset which resulted in long-term capital gains. The Tribunal has held that the relevant date in this connection is July 29, 1988, when the petitioner paid the full consideration amount on the flat becoming ready for occupation and obtained possession of the flat. This has been taken by the Tribunal as the date of purchase. The Tribunal has looke ..... X X X X Extracts X X X X X X X X Extracts X X X X
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