9911796707
TMI Blog2025 (5) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case and in law, the final assessment order dated 10.12.2024 (signed on 12.12.2024) passed by the assessing officer ('AO') in pursuance of the directions of the Dispute Resolution Panel (hereinafter referred to as "DRP") under section 143(3) r.w.s.144C of the Income Tax Act. 1961 ('the Act"), is bad in law and unsustainable. 1.1 That on the facts and circumstances of the case and in law, the impugned order passed by the assessing officer beyond the statutory time limit prescribed under section 153(1) of the Act is barred by limitation and bad in law. 1.2 That the assessing officer erred on facts and in law in completing assessment under section 143(3)/144C(13) of the Act, at an income of Rs. 1,90,91,566 as against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 234D of the Act." 3. Ground No. 1 and 1.2 are general in nature. 4. Ground No. 1.1 has not been pressed by the ld. counsel for the assessee. The same is dismissed as not pressed. 5. The sole issue is with regard to the exemption u/s 54 of the Income-tax Act, 1961 [the Act, for short] on the expenses incurred for making the flat habitable. 6. Brief facts of the case is that the assessee is an individual having status of non-resident during the year under consideration. The assessee filed a return of Income declaring income of Rs. 41,88,818/- on 28.07.2002, after claiming the exemption under section 54 of the Income Tax Act, 1961. 7. During the year under consideration, the assessee sold her share (50%) in a residential house located ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of a new property from the date of sale of residential house, ie, 05.07.2021 and iii) The expenditure amounting to Rs. 37,56,748 has not been incurred for the purpose of interior works during the year, but the payments made to the builder towards the cost of the flat, which was paid in financial year 2021-22. 9. On appeal before the DRP, the assessee did not succeed and therefore the assessee is before us. 10. At the very outset, the ld. counsel for the assessee submitted that the case of the assessee is squarely covered in favour of the assessee and against the Revenue by the decision of the ITAT, Delhi in assessee's own case for the A.Y 2020-21. The ld. counsel for the assessee further submitted that the decision of the ITAT has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f three years from the date of sale is not satisfied. The ld AO/DRP held that as the date on which property sold is 05.07.2021, the construction of one residential house in India should have started after 05.07.2021. According to the ld AO/DRP, as the construction of one residential house in India was completed and possession taken on 01.03.2021, the case is not eligible for exemption u/s 54. 14. We find from the facts of the case that the AO/DRP has mistakenly considered that the one residential House was constructed and possession given on 01.03.2021. The facts of the case shows that the assessee earned capital gains from sale of the old property on 05.07.2021 for which she is claiming deduction u/s 54 of the IT Act. The builder handed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s declined to interfere with the order of the ITAT and dismissed the appeals of the Revenue. 16. After considering the material on record and perusing the Tribunal order and the order of the Hon'ble High Court [supra], we are of the considered opinion that the expenditure incurred to make the flat habitable as also the payments towards cost of the flat is eligible for benefit u/s 54 of the Act. We, therefore, direct the Assessing Officer to deleted the impugned addition. We, therefore, allow ground no. 2 and its sub-grounds of appeal. 17. Ground no 3 regarding interest u/s 234D is consequential in nature. 18. In the result, appeal of assessee in ITA No. 306/DEL/2025 is partly allowed. The order is pronounced in the open court on 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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