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TMI Blog2018 (10) TMI 1861X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional grounds of appeal: 2.The Learned Assessing Officer vide order dated 10/03/2015 u/s. 143(3) of the Act disallowed my claim of Long Term Capital Gains and treated the sale of the residential flat as Short Term Capital Gains. Consequently the Assessing Officer did not allow the exemption u/s 54 as claimed be me. 3. Brief facts of the case are that the assessee filed her return of income for Assessment Year 2012-13 on 31.09.2012 declaring total income of Rs. 28,92,390/-. In the computation of income, the assessee claimed Long Term Capital Gain on sale of residential flat No. 302, Oberoi Springs, Mumbai (Flat) on 05.10.2011. The assessee claimed acquisition of flat on 25.04.2008. The said flat was sold by assessee on 05.10.2011 for sale consideration of Rs. 2,90,00,000/-. The assessee claimed indexation cost and after deducting the indexation cost from sale price, the assessee has shown/ claimed capital gain of Rs. 1,65,83,053/-. The assessee invested Rs. 1,40,00,000/- for purchase of new house/ flat and claimed exemption thereof and remaining amount of Rs. 25,83,053/- was offered for Long Term Capital Gain. During the assessment proceeding, the Assessing Officer asked the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentary evidence is required to be brought on record. The assessee inadvertently omitted to raise the ground related with the exemption under section 54 of the Act. The ld. AR of the assessee further submits that additional ground related with exemption under section 54 is purely a legal issue, which does not require ascertainment of new facts. 6. On the other hand, the ld. DR for the Revenue not strongly opposed the raising of additional ground of appeal. 7. We have considered the contention of ld. representatives of parties and found that in the computation of total income, the assessee has claimed Long Term Capital Gain and exemption under section 54 of the Act for reinvestment of sale proceed in new residential house within two year after the date of transfer of old asset (old house). The contention of the assessee regarding the investment of capital gain is recorded by assessing officer in para 4.1(iv) of his order. Considering the nature of claim for which no new facts are necessary to be brought on record. We admit the additional ground of appeal raised by assessee. 8. Ground No.1 relates to treating the gain on sale of residential flat as Short Term Capital Gain instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se agreement from the original allotees the agreement to sale was executed on 19th July 2009 and was registered on 3rd August 2009. This agreement was executed in lieu of allotment letter dated 17/05/2006 & 25 /04/2008, which is duly endorsed on the agreement. We have also perused the contents of the allotment letter issued by the builder. The perusal of allotment reveals that Rs. 8,78,405/- was paid on account of earnest money, Rs. 13,17,608/- was paid at the time of issuing of allotment letter. Rs. 4,39,203/- was payable on completion of plinth of the building, Rs. 47,43,387/- was payable in forty equal instalment on completion of 40th slabs of the building where the said flat is situated. Rs. 3,51,362/- was payable on completion of brick work of the building, Rs. 3,51,362/- was payable at the time of plastering of building. Rs. 3,51,362/- on completion of flooring and tiling and remaining similar balance of Rs. 3,51,362/- was payable at the time of ready to use of the flat. Thus, entire amount was payable in a time frame manner, which is linked to the progress of the construction. 12. The CBDT vide circular No. 471 [F. NO. 207/27/85-IT(A-II)], DATED 1510-1986 issued following i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 16-12-1993 issued following instructions: 1. Attention is invited to Board's Circular No. 471, dated 15-10-1986. It was clarified therein that cases of allotment of flats under the Self-Financing Scheme of the Delhi Development Authority (DDA) should be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act. The Board has since received representations that even in respect of allotment of flats/houses by co-operative societies and other institutions, whose schemes of allotment and construction are similar to those of Delhi Development Authority, a similar view should be taken. 2. The Board has considered the matter and has decided that if the terms of the schemes of allotment and construction of flats/houses by the co-operative societies or other institutions are similar to those mentioned in para 2 of Board's Circular No. 471, dated 15-10-1986, such cases may also be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act. 14. The Hon'ble Delhi High Court in CIT vs. Ramakrishnan [2014] 363 ITR 59 (Del.) held that in order to determine taxability of capital gain arising from sale of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otment letter. In case, the holding period is more than 36 month from the date of allotment till the date of transfer, the asset is to be treated as Long Term Capital Asset in the hand of assessee and on transfer of such asset; the assessee would be entitled for Long Term Capital Gain. Now coming the facts of the present case, the assessee acquired the right in flat no. 302, 3rd Floor, Tower-C with car parking in Oberoi Spring, Oshiwara, Andheri vide allotment letter dated 25.04.2008, which is duly confirmed and acknowledge by M/s Oberoi Construction. The assessee sold the said flat on 05.10.2011. Therefore, the gain earned by assessee is taxable as Long Term Capital Gain. Hence, the ground no.1 of the appeal raised by assessee is allowed. 17. Ground No.2 relates to claim of exemption under section 54 of the Act. In view of our finding on ground no.1 wherein the assessee is declared entitled for Long Term Capital Gain. We have noted that the Assessing Officer disallowed the exemption on his observation that assessee had invested capital gain for purchase of two flats. 18. The Hon'ble Karnataka High Court in CIT vs. Jyothi K. Mehta (201 Taxman 79) held that in newly asset acquired ..... X X X X Extracts X X X X X X X X Extracts X X X X
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