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2017 (1) TMI 1675 - AT - Income TaxExemption u/s. 54F and 54EC - LTCG - relevant assessment year - transfer u/s. 2(47) and possession of capital asset in the previous year - Whether CIT(A) has erred in deleting the addition of income from Long Term Capital Gains on the basis of the unregistered sale agreement dated 23.07.2008, whereas, the sale deed registered on 27.04.2009 and relied on the provisions of section 53A of the Transfer of Property Act ? - HELD THAT - CIT(A) has considered these workings and discussed elaborately in his orders emphazing on the provisions of section 50C and 2(47) of the Income Tax Act and sec. 53A of the Transfer of Property Act. We are conscious that there has since been amendment to sec. 50C(1) incorporating the word or assessable , so that the value that would stand to be assessed would substitute the stated consideration. The said amendment, as held in CIT Vs. R. Sugantha Ravindran 2013 (3) TMI 271 - MADRAS HIGH COURT is effective only from 01.10.2009, i.e., subsequent to the transfer date in the present case. Hence, capital gains have to be assessed for the assessment year 2009-10 and there is no dispute on the compliance of requisite conditions for claiming exemption u/s. 54 and 54EC for the assessment year 2009-10. Thus assessee has complied the provisions of law and CIT(A) has considered these aspects Vis-a-vis the explanations of the assessee and findings of the Assessing Officer and deleted the addition - Decided against revenue
Issues:
1. Disallowance of Long Term Capital Gains by the CIT(A) for the assessment year 2010-11. 2. Determination of the cost of acquisition for the property sold by the assessee. 3. Appeal filed by the Revenue against the order of the CIT(A) regarding Long Term Capital Gains. Issue 1: Disallowance of Long Term Capital Gains by CIT(A) The Revenue appealed against the CIT(A)'s decision to delete the disallowance of Long Term Capital Gains for the assessment year 2010-11, where the transfer occurred in the financial year 2008-09. The Revenue argued that the transfer took place only upon registration of the sale deed on 27.04.2009, contrary to the CIT(A)'s application of section 2(47)(vi) of the Act. The CIT(A) found that the transfer was complete based on the sale agreement dated 23.07.2008, and the possession was given to the purchaser, leading to the conclusion that the capital gains were taxable in the relevant assessment year 2009-10. The CIT(A) relied on judicial decisions and upheld that the transfer was effective in the financial year 2008-09, resulting in no Long Term Capital Gains for the assessment year 2010-11. The Revenue's appeal was dismissed. Issue 2: Determination of the cost of acquisition The second issue involved the determination of the cost of acquisition for the property sold by the assessee. The Assessing Officer adopted the Fair Market Value at ?10.41 per sq.ft., which was contested by the assessee. The CIT(A) considered a DVO certificate valuing the property at ?3,85,000 per ground as on 01.04.1981. The CIT(A) noted that the transfer took place based on the sale agreement dated 23.07.2008, before the amendment of section 50C(1) of the Act on 01.10.2009. Therefore, the amended provisions were deemed not applicable to the assessee. The CIT(A) partly allowed the appeal, concluding that the provisions of section 50C were not applicable as the transfer occurred before the amendment date. Issue 3: Appeal filed by the Revenue The Revenue filed an appeal against the CIT(A)'s decision to delete the addition of income from Long Term Capital Gains based on the unregistered sale agreement dated 23.07.2008. The Revenue contended that the transfer to the purchaser was effective only on 27.04.2009, as per the registered sale deed. The Revenue relied on the provisions of section 53A of the Transfer of Property Act, arguing that the CIT(A) overlooked the transfer date. However, the Tribunal upheld the CIT(A)'s decision, emphasizing compliance with the law and the CIT(A)'s thorough consideration of the relevant provisions and judicial decisions. The Revenue's appeal was dismissed, affirming the CIT(A)'s order. In conclusion, the ITAT Chennai upheld the CIT(A)'s decision regarding the disallowance of Long Term Capital Gains and the determination of the cost of acquisition for the property sold by the assessee. The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s findings and decisions based on the provisions of the Income Tax Act and the Transfer of Property Act.
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