2021 (9) TMI 1215 - AT - Income Tax

Exemption u/s 54 - whether the sale agreement entered into by the assessee on 08.04.2015 is genuine or not? - HELD THAT - As gone through the sale agreement, which do not bear the signature of the assessee and also translated copy of the sale agreement into English dated 08.04.2015 and found that nowhere in the sale agreement it is mentioned that the possession was given to the assessee. In the alleged letter filed by the assessee that the amount was paid and possession was handed over to the assessee, neither date is mentioned nor there is signature from the sellers of the property. As per the sale deed dated 04.07.2016, the entire amount was received by the sellers on 04.07.2016 and possession was also handed over to the assessee on 04.07.2016. Under the above facts and circumstances, we are of the opinion that the sale agreement dated 08.04.2015 is not genuine. Accordingly, the benefits under section 54 of the Act cannot be granted to the assessee for the main reason that the sale deed clearly mentions that the entire sale consideration was received on the same day and possession was also handed over. - Decided against assessee.

Summary

Issues:
1. Claim of exemption under section 54F of the Income Tax Act.
2. Validity of sale agreement dated 08.04.2015.
3. Entitlement to benefit under section 54 of the Act.

Analysis:
1. The appellant, an individual, declared total income and admitted capital gains, seeking exemption under section 54F for purchasing a house. However, it was discovered that the appellant already owned a house, rendering him ineligible for exemption under the Act's proviso. The Assessing Officer rejected the claim, which was upheld by the ld. CIT(A).

2. The appellant contended that a sale agreement dated 08.04.2015 facilitated the property purchase within two years, qualifying for section 54 benefits. The authenticity of this agreement was challenged by the ld. DR, emphasizing a subsequent sale deed dated 04.07.2016 as conclusive evidence of full payment and possession transfer on the same day.

3. The Tribunal deliberated on the genuineness of the 08.04.2015 sale agreement, noting discrepancies such as the absence of the appellant's signature and possession details. In contrast, the 04.07.2016 sale deed explicitly confirmed full payment and possession transfer, leading to the conclusion that the earlier agreement was not genuine. Consequently, the appellant was deemed ineligible for section 54 benefits, affirming the lower authorities' decisions.

Judgment:
The Tribunal dismissed the appeal, upholding the denial of exemption under section 54F due to the appellant's existing property ownership and the lack of authenticity in the 08.04.2015 sale agreement. The conclusive evidence from the 04.07.2016 sale deed supported the decision, affirming the ineligibility of the appellant for the Act's benefits.