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2024 (7) TMI 1334 - AT - Income TaxLTCG - Deduction u/s 54 - appellant did not fulfill the mandatory condition of acquiring a new residential flat within the specified time period - CIT(A)-NFAC invokes the former limb of one year before the transfer i.e., 28.03.2012 and the date of transfer itself dated 29.03.2012 to conclude that the same falls beyond the prescribed period of one year and therefore, the assessee is not entitled for the same - HELD THAT - The relevant date in such an instance; for the purpose of computing the limitation in all three eventualities in sec.54, has to be taken in light of the payment of consideration and possession of the new house property only. DR could hardly rebut the fact that the various judicial precedents in learned CIT(A)-NFAC s detailed discussion Smt. Beena K. Jain 1993 (11) TMI 7 - BOMBAY HIGH COURT , Sunil Amritlal Shah 2024 (5) TMI 699 - ITAT MUMBAI Bastimal K. Jain 2016 (6) TMI 1243 - ITAT MUMBAI Sanjay Vasant Jumde 2023 (3) TMI 1222 - ITAT PUNE already stand duly considered and therefore, we hold the assessee is entitled for the impugned sec.54 deduction in very terms. Decided in favour of assessee.
Issues:
1. Disallowance of sec.54 deduction claim by the assessing officer. 2. Interpretation of the relevant dates for sec.54 deduction eligibility. 3. Applicability of judicial precedents in determining sec.54 deduction eligibility. Analysis: Issue 1: Disallowance of sec.54 deduction claim The assessee appealed against the disallowance of his sec.54 deduction claim amounting to Rs. 1,69,47,407 in the assessment for the year 2015-2016. The CIT(A) upheld the disallowance based on the timing of the purchase of a new residential flat in relation to the sale of the old property. The assessing officer concluded that the appellant did not fulfill the mandatory condition of acquiring a new residential flat within the specified time period under section 54 of the Income Tax Act, 1961. Issue 2: Interpretation of relevant dates for sec.54 deduction eligibility The primary contention revolved around the interpretation of the relevant dates for sec.54 deduction eligibility. The appellant argued that the date of possession should be considered as the date of acquisition for the new flat. However, based on judicial precedents, including the decision of the Bombay High Court and the ITAT, it was established that the date of allotment or registration of the agreement for sale should be considered as the date of acquisition for the purposes of sec.54. The Tribunal held that the date of possession is immaterial in the conveyance of immovable properties. Issue 3: Applicability of judicial precedents The Tribunal considered various judicial precedents that supported the assessee's position regarding the interpretation of the relevant dates for sec.54 deduction eligibility. Rulings such as CIT vs. Smt. Beena K. Jain and other cases settled the issue in favor of the assessee, emphasizing that the relevant date for computing the limitation under sec.54 should be based on the payment of consideration and possession of the new house property. The Tribunal found merit in the appellant's arguments and allowed the appeal, directing that necessary computations be made as per law. In conclusion, the Tribunal allowed the assessee's appeal, overturning the disallowance of the sec.54 deduction claim based on the interpretation of the relevant dates and the applicability of judicial precedents supporting the assessee's position.
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