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TMI Blog2023 (1) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961. 1. Your honor, hon AO has made an addition of Rs.28,79,000/- during the assessment proceedings by disallowing the exemption under section 54F which has not even been claimed by the assessee in her income tax return. Therefore, the disallowance of exemption under section 54F does not enhance the income of the assessee. 2. Your honor, hon AO has not considered the facts of the case i.e. exemption has been claimed by the assessee under section 54, as LTCG of Rs. 28,79,000/- was utilized against the purchase of residential flat no. 301, 3rd floor, block-1, Samapada Co-operative Ground Housing Society Ltd., plot no. GH-06, Sector-46, Faridabad, Haryana. Therefore, no addition is legitimate by the hon AO. 3. Your honor, the fact of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 54. Your honor, hon AO has not raised question during the assessment proceedings for the legitimacy of LTCG and without considering the provision of section 2(47) of the Income Tax Act,1961 and wrongly taken the date of transfer 12/12/2012 i.e. date oi registered sale deed which is incorrect and against the provision of section 2(47) of the Income Tax Act,1961.As per section 2(47) clause (v) St (vi) read with explanation 2 in which it is clarified as per clause (v) St (vi)of section 2(47) as follows:- "(v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.]" The assessee entered into tri-part agreement with the owner and contractors on 26/05/2011 and started their construction on the flat (which is reasonable certain, as per agreement to sale) owned according to section 53A of the transfer of tm properties Act, 1882. As the transfer took place on the date of Agreement datec 26/05/2011, which is more than before 3 years from the date of sale i.e. 19/02/2.015. therefore disallowance of capital gain under section 54 is bad in law and unjustified. Your honor, in our support in this condition we quote the case of Sanjeev Lai vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is in appeal before this Tribunal. 5. Learned DR supported the orders of the authorities below. 6. I have heard learned DR and perused the material available on record. The learned CIT(Appeals) has decided the issue by observing as under: "7. The facts of the case as well as material available on record and arguments of the Learned AR have been gone through. The appellant has entered into an agreement with Smt. Asha madan and Smt. Shashi Bala, owners of (house No. 215, Sector-15A, Faridabad) vide Agreement dated 26.05.2011. In the said agreement, it has been agreed that the existing house would be demolished and would be reconstructed. For this purpose, the construction cost of Rs.36,21,000/- would be borne by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the present case are different from the case of Shri Sanjeev Lai (supra) as relied by the appellant as no payment part/ full has been made by the appellant to Smt. Asha Madan and Smt. Shashi Bala on Sector-15A, Faridabad) vide Agreement dated 26.05.2011. In the said agreement, it has been agreed that the existing house would be demolished and would be reconstructed. For this purpose, the construction cost of Rs.36,21,000/- would be borne by the appellant and in return she would be entitled to get 1st floor of the newly constructed house. It is specifically mentioned in Clause (3) of the said agreement that the upon final construction and finishing of all floors, 1st floor of the newly constructed house would be transferred to the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been signed and the appellant has not taken the possession of the 1st floor on 26.05.2011 as it was not in existence on 26.05.2011. Whereas in the case of Sanjeev Lai (supra) possession and payment have taken place on the date of the agreement itself. On the careful consideration of the facts of the case, it is noted that the appellant has acquired 'the 1st floor of the immovable property situated at Section 15A, Faridabad' on 12.12.2012. It is, therefore, held that the AO was justified in treating the same as short-term capital asset and denying the benefit of deduction u/s 54 of the Act. The same is hereby confirmed. Thus, the ground of appeal of the appellant is dismissed." 7. The above finding of fact recorded by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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