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2019 (9) TMI 295 - AT - Income TaxDeduction u/s 54F - Assessee has claimed deduction for 4 flats purchased by her and not a single flat - The flats were purchased in joint name i.e., of the assessee along with her son - Assessee had purchased the flat beyond the period of two years prescribed under the provisions - Unutilized portion of the amounts subject to capital gains tax was not deposited in capital gain account scheme as mandated u/s 54F(4) - The purchase of flats by the assessee was from a family firm. HELD THAT - With respect to purchase of four flats, it is an undisputed fact that the flats were booked by the assessee vide allotment letter dated 12.07.2011 when the building was under construction. The entire payment for the purchase of flats has been made upto September 2012 i.e., upto the date of filing of return of income. It is Revenue s contention that the assessee had acquired the new asset only when the agreement was entered into on 19.03.2013 i.e., after the stipulated period. We find that recently Hon ble Bombay High Court in the case of Vembu Vaidyanath 2019 (1) TMI 1361 - BOMBAY HIGH COURT after considering the CBDT Circular No.471 dated 15.10.1986 and Circule No.672 dated 16.12.1993 has held that the date of issuance of allotment letter by the builder is the date of acquisition of property. Deduction on four flats purchased by the assessee - the submission of the assessee that all the four residential flats are adjacent flats located on the same floor of the building has not been controverted by the Revenue. In the case of Trilokchand and Sons Vs. ITO 2019 (4) TMI 713 - MADRAS HIGH COURT has held that so long as the assessee has purchased one more residential house out of the sale consideration for which the liability to the capital gain tax u/s 45 arises, assessee was entitled to deduction thereunder on the entire investment. Hon ble Delhi High Court in the case of CIT Vs. Gita Duggal 2013 (3) TMI 101 - DELHI HIGH COURT has held that the fact that residential house consists of several independent units cannot be the reason for denying the claim of deduction u/s 54/54F of the Act. Purchasing flats in joint name is concerned, it is the assessee s contention that the entire consideration towards the purchase of flats was invested by the assessee and no amount was contributed by her son and further the name of the son was included as joint owner to avoid legal complication as the assessee is an old lady. The aforesaid submissions have not been controverted by the Revenue. We find that Hon ble Karnataka High Court in the case of DIT Vs. Mrs. Jennifer Bhinde 2011 (9) TMI 161 - KARNATAKA HIGH COURT has observed that to attract Sec.54 and Sec.54EC of the Act, what is the material is investment of sale consideration in acquiring the residential premises or constructing a residential premises or investing the amounts in the bonds. In the entire section of 54, the requirement that purchase to be made or the construction to be put up by the assessee is in the name of the assessee is not expressly stated. We further find that the Hon ble Delhi High Court in the case of CIT Vs. Kamal Wahal 2013 (1) TMI 401 - DELHI HIGH COURT has also held that the new residential house need not be purchased by the assessee in his own name or exclusively in his name. Not depositing the unutilized portion of amount subject to capital gains in capital gain account scheme - it is fact that assessee had not filed the return u/s 139(1) of the Act but had filed the return of income within the time limit prescribed u/s 139(4) of the Act which was upto 31.03.2013. It is assessee s case that prior to filing of income tax return, assessee had utilized the entire sale proceeds in acquisition of the new residential house. The aforesaid contention of the assessee has not been controverted by Revenue. We find that Hon ble Punjab and Haryana High Court in the case of CIT Vs. Ms. Jagriti Aggarwal 2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT has held that benefit of Sec.54 of the Act is allowable when the assessee has acquired the new asset before filing of return of income. Co-ordinate Bench of the Tribunal in the case of Ramarao Dhondiba Pimple Vs. ITO 2017 (10) TMI 1481 - ITAT PUNE after considering the decisions of Hon ble Gauhati High Court in case of CIT Vs. Rajesh Kumar Jalan 2006 (8) TMI 126 - GAUHATI HIGH COURT and CIT Vs. Ms. Jagriti Aggarwal 2013 (4) TMI 499 - PUNJAB AND HARYANA HIGH COURT and the decision of Hon ble Bombay High Court in the case of Humayun Suleman Merchant Vs. CCIT 2016 (9) TMI 70 - BOMBAY HIGH COURT has held that assessee is eligible to claim exemption in respect of investments made before filing of return of income. Assessee is eligible for deduction u/s 54F of the Act. We therefore direct the AO to grant deduction. Thus, the grounds of the assessee are allowed.
Issues Involved:
1. Assessment of Long Term Capital Gains on transfer of leasehold rights. 2. Rejection of relief under Section 54F of the Income Tax Act, 1961. Issue-Wise Detailed Analysis: 1. Assessment of Long Term Capital Gains on Transfer of Leasehold Rights: The appellant initially raised a ground challenging the assessment of Long Term Capital Gains of ?1,09,91,914 on the transfer of leasehold rights in a plot of land. However, during the proceedings, the appellant's representative stated that this ground would not be pressed. Consequently, this ground was dismissed. 2. Rejection of Relief under Section 54F of the Income Tax Act, 1961: The appellant's primary contention was the denial of relief under Section 54F, which pertains to the exemption of capital gains tax when the proceeds are invested in a residential property. The key points of contention and findings were as follows: a. Investment in Multiple Flats: The appellant had invested the sale proceeds in four adjacent flats on the same floor, claiming them as a single residential unit. The Revenue argued that the deduction could only be claimed for one flat. The Tribunal noted that prior to the amendment in AY 2015-16, the term "a residential house" could include multiple units if they formed a single residential house. Thus, the appellant's claim was valid. b. Joint Ownership with Son: The flats were purchased in joint names with the appellant's son. The appellant argued that the entire investment came from her funds, and her son's name was included to avoid legal complications due to her age. Citing precedents, the Tribunal held that the investment's source was crucial, not the title's name. Therefore, the joint ownership did not invalidate the claim. c. Timing of the Purchase: The appellant sold the original asset on 20.04.2010 and booked the new flats on 12.07.2011, with payments completed by 12.09.2012. The Revenue contended that the purchase agreement dated 19.03.2013 was beyond the two-year limit. The Tribunal, referencing the CBDT Circular No.471 and judicial precedents, held that the date of allotment (12.07.2011) was the acquisition date, making the investment timely. d. Non-deposit in Capital Gain Account Scheme: The appellant did not deposit the unutilized capital gains in a Capital Gain Account Scheme but invested the funds before filing the return under Section 139(4). The Tribunal, relying on judicial interpretations, concluded that the extended deadline under Section 139(4) applied, and since the investment was made before this deadline, the claim was valid. e. Purchase from a Family Firm: The flats were bought from a firm where the appellant's sons were partners. The Revenue suggested this was a decorative transaction to evade tax. The Tribunal found no evidence of sham transactions and noted that the law did not prohibit purchasing property from related parties. Conclusion: The Tribunal directed the Assessing Officer to grant the deduction under Section 54F, thereby allowing the appellant's grounds. The appeal was thus allowed in favor of the appellant.
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