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TMI Blog2022 (12) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... is before Hon'ble Bench for the above addition of Rs.82,40,000/-, which was sustained by CIT(A) in her Order on 21/4/2016. 5.The Ld. AO failed to consider the original allotment of land dated 04/08/1984 & original sale agreement dated 05/12/2003 to arrive at the period of holding. 6.Instead, the Ld. AO considered sale deed in favour of the appellant (ie, purchase- on 6/01/2012 and sale deed executed by the appellant (ie, sale- on 12/04/2012) and hence concluded the same as bought & sold within a year and treated as STCG without considering the para 5 above. 7.Further, the Ld. AO also denied the exemption u/s 54F without considering the investment made by the appellant on purchase of land in Potheri & advances made for the construction. 8. Thus, it is prayed before the Hon'ble Forum to treat the said transaction as Long Term and allow deduction u/s 54F as the said investment in the new asset is ready and put to use. 9. For the above reasons and other reasons that may be adduced at the time of hearing, the addition made by the Ld. AO may kindly be deleted and justice rendered. 10.The appellant craves leave to amend, alter or delete any of the above grounds of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had also contested denial of deduction u/s. 54F of the Act. The CIT(A) after considering submissions of the assessee and also taken note of various facts, opined that the land sold by the assessee is short term capital asset, because the assessee has purchased the property on 06.01.2012 and sold the same on 12.04.2012, and the period of holding is less than 36 months. Therefore, the AO has rightly assessed profit under the head short term capital gains. The CIT(A) had also rejected deduction u/s. 54F of the Act, because the deduction is available only in respect of transfer of long term capital asset and not to short term capital asset. The relevant findings of the CIT(A) are as under: 8. Decision : I have duly considered the assessment order, written submissions and various details filed by the appellant in adjudicating the instant appeal. From the perusal of grounds of appeal taken by the appellant, there exist three issues which require to be addressed in the instant appeal, which are as follows: i.Whether the land sold by the appellant on 12.04.2012 is a short term or long term capital asset? ii.In case, the above land is of long term in nature, whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellant. Therefore, I have no hesitation in upholding the action of the AO in assessing the consideration frorri the sale of said land as Short Term Capital Gains Hence, the ground of the appellant is dismissed. Issue No.2:- Claim of deduction U/s.54F Since the land at Madambakkam is a Short Term Capital Asset, the appellant is not entitled for deduction U/s.54F because the deduction is available only in respect of transfer of long term capital assets and not to short term capital assets. Hence, the ground of the appellant is dismissed. Issue No3: Taxability of sale of land situated at Nayapakkam Village: On 14.06.2012, vide registered sale deed numbering 3393 of 2012, the appellant's spouse Shri. V.G> Pannerselvam acting as Power gent on behalf of Smt P.Chitra and Smt Geetha Chandrasekaran had sold a land situated at Nayapakkam Village for a consideration of Rs. 24,96,000/- the appellant's son-in-law The AO treated the sum of Rs.24.96.000- as taxable income of the appellant under the head "Capital Gains" and after allowing deduction towards cost of Rs.5,63,670/-, the resulting sum of Rs.19,32,330- is assessed in the appellant's hands. From the perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction of house property and paid a sum of Rs. 20,00,000/- and Rs. 30,00,000/-, respectively. The contractors could not complete the construction within the time allowed in the agreement because of various reasons, but finally a settlement was reached with the contractors and construction was completed in the year 2019. However, the assessee has spent substantial amount, not less than the amount of consideration received for sale of property for the purpose of acquiring new asset and therefore, merely for the reason of non-completion of house property within the stipulated period, benefit of deduction u/s. 54F of the Act cannot be denied. In this regard, relied upon the following judgments: 1. CIT v Ravindar Kumar Arora (2012) 342 ITR 38 Delhi 2. CIT v Sardarmal Kothari and another (2008) 302 ITR 286 3. CIT v Sambandan Udayakumar (Karnataka High Court) 4. Nipom Mehotra v ACIT (2008) 110 ITD 520 (Bangalore) 7. The Ld. DR, on the other hand referring to allotment letter from M/s. Baskar & Co., submitted that documents furnished by the assessee are not convincing. Although, assessee claims to have get allotment of flat in the year 1984, but could not explain substantial del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty for a consideration of Rs. 4,00,000/- and also paid a sum of Rs. 20,000/- as advance. Finally, the property has been conveyed to the assessee by registered sale deed dated 06.01.2012 by Smt. G. Meenakshi, through PoA holder Mr. R. Radhakrishnan for a consideration of Rs. 4,00,000/-. The assessee has filed right from allotment letter to PoA, sale agreement and registered sale deed. From the documents furnished by the assessee, we find originally the land was purchased by Smt. G. Meenakshi and Shri. Baskar, son of Smt. Meenakshi in the year 1983. Smt. Meenakshi and Shri Baskar developed the land into residential flat in the name of M/s. Baskar & Co. and sold to prospective buyers. Therefore, from the above facts, there is no doubt with regard to allotment letter furnished by the assessee from M/s. Baskar & Co., stating that the impugned property has been allotted to the assessee on 28.12.1984. We further analyzed, documents like PoA between Smt. Meenakshi and Shri. R. Radhakrishnan, subsequent sale agreement and sale deed. From the above documents, one undoubted fact emerged is that the ultimate purchaser of the property is the assessee Smt. P. Chitra, because the allotment let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential house which includes purchase of land, payment for labour charges and payment to M/s. Raj Constructions for material supply. However, the contractors M/s. Chintu Constructions and M/s. Raj Constructions could not complete construction for various reasons. In the mean time, the assessee went out of India for official work and could not oversee construction work and only after she came back settled dispute with contractors and ultimately completed construction in the year 2009 and obtained necessary electricity connection to prove that the house property has been successfully completed. No doubt, the assessee could not complete construction of house within three years from the date of transfer of original asset. However, for any reason which is beyond control of the assessee, construction could not be completed and also assessee has spent entire amount of consideration received for transfer of original asset for acquiring new asset, then there is no reason for the AO to deny deduction u/s. 54F of the Act. Further, provisions of section 54F should be construed liberally as per various High Court decisions including Hon'ble Madras High Court in the case of CIT vs Sardarmal Kotha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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