TMI Blog2021 (9) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... ed sale deeds are entered into on 06.02.2012. Under these facts and circumstances, denying the benefit of deduction u/s.54F for excess consideration paid over and above consideration shown in registered sale deed is not correct because, merely for the property was registered for a lesser consideration, the genuine transaction between the parties cannot be doubted when it comes to allowing benefit under exemption / deduction provisions. AO as well as the ld.CIT(A) has erred in sustaining addition towards disallowance of exemption claimed u/s.54F towards consideration paid for purchase of property. Restriction of cost of improvement - HELD THAT:- AO has not given any valid reasons for rejecting cost of improvement to the extent of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as on facts while confirming the following additions: I. Claim of Exemption u/s 54 of the Income Tax Act Claim u/s 54 restricted to ₹ 28,00,000 instead of ₹ 58,00,000/- II. Restriction of Cost of Improvement Cost of Improvement restricted to ₹ 3,50,000 instead of ₹ 3,00,000/- 2. Claim of Exemption u/s 54 of the Income Tax Act 1) The Honorable CIT (A)-9 has erred in overlooking the Provisions of Sec 54 of the Income tax Act where the word used is that the cost of the residential house So Purchased and nowhere the section talks about the sale consideration in sale deed or sale agreement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. 8) The Honorable C.I.T (A)-9, is more concerned about the seller's Income Tax Return rather than the factual evidences provided before both ACIT and CIT (A)-9. 9) The Honorable C.I.T (A)-9 erred deciding the consideration as ₹ 28,00,000/- as admitted by the seller in his return by overlooking the consideration received amounting to ₹ 58,00,000/- admitted by the seller in response to the notice u/s133(6) issued by the ACIT and also as per agreement. 10) The Appellant prays to consider the value of consideration as ₹ 58, 00,000/- and not as ₹ 29,00,000/- by considering the grounds placed before the Honorable ITAT and render justice. 3. Restriction of Cost of Improvement u/s 55 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d computed long term capital gain after claiming deduction towards cost of acquisition and cost of improvement. The assessee had also claimed deduction u/s.54F of the Income Tax Act, 1961 (hereinafter the Act for ₹ 58,00,000/- towards purchase of new residential house from Shri G. Murugesan vide sale agreement and sale deed dated 06.02.2012. The AO has re-computed long term capital gain by restricting cost of improvement to ₹ 3,00,000/- as against ₹ 3,50,000/- claimed by the assessee, on the ground that the assessee has proved source for cost of improvement to the extent of ₹ 3,00,000/- only, by way of loan taken from M/s. Canara Bank. The AO had also allowed exemption u/s.54F of the Act, to the tune of ₹ 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he registered sale deed and agreement to sale, both dated 06.02.2012 submitted that evidences placed on record clearly indicate that transaction is a genuine transaction and entire consideration is paid through bank. Merely for the reason that the property was registered for lesser amount as per requirement of stamp and registration Act, total consideration paid for purchase of property cannot be ignored, more particularly when both parties agreed that sale consideration for property was at ₹ 58 lakhs. 5. The ld.DR on the other hand strongly supporting order of the ld.CIT(A) submitted that although the assessee has paid consideration in cheque but, the purpose of payment of excess amount is not discharged because the consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction between the parties cannot be doubted when it comes to allowing benefit under exemption / deduction provisions. Therefore, we are of the considered view that the ld.AO as well as the ld.CIT(A) has erred in sustaining addition towards disallowance of exemption claimed u/s.54F of the Act, to the tune of ₹ 30 lakhs towards consideration paid for purchase of property. Hence, we direct the AO to delete addition made towards disallowance u/s.54F of the Act. 7. The next issue that came up for our consideration from Ground No.3 of assessee appeal is restriction of cost of improvement to the tune of ₹ 3 lakhs as against cost of improvement claimed by the assessee for ₹ 3,50,000/-. 8. The assessee has claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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