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2022 (4) TMI 664 - AT - Income TaxExemption under section 54F - property sold was jointly owned by the assessee with his late father in the ratio of 27 73 - HELD THAT - Undisputedly, the assessee was joint owner of property having 27% share. The 73% share in property was that of assessee s father.We find that the issue of exemption under section 54F of the Act had cropped up in the appeal of assessee s fathers 2019 (12) TMI 1588 - ITAT MUMBAI as decided there exist 2 penthouses at the site developed by the developer as per the terms of agreement in modified development agreement - development agreement was entered by the assessee along with his son with share of 73 27 between them and it is clear that there exist 2 penthouses and two individual assessee. Therefore, each assessee will get separate exemption u/s 54F - This benefit is legally available to both the assessee. There are catena of cases in which courts have held that when there exists two portion of flats with one kitchen then the whole combined portion of the area will be treated as one single unit for the purpose of granting exemption u/s 54 as well as 54F. Accordingly, we direct the AO to grant exemption u/s 54F of the Act to each assessee and as per their choice. On record, assessee prefers to get penthouse occupied by his daughter as exemption u/s 54F and by legally AO should allow this penthouse as exemption u/s 54F Thus we hold that the assessee is eligible for exemption under section 54F of the Act, hence, ground of appeal by assessee is allowed for parity of reasons. Long Term Capital Gains - Sale of society flat - proportionate portion of land in the society - AO rejected the contention of assessee that sale consideration includes consideration for land - as argued agreement entered into by the assessee with the buyers of flats does not state that ownership of the land has been transferred to the buyers - HELD THAT - CIT(A) allowed assessee s claim of Long Term Capital Gains is to be charged on sale of land. We find that there is no contrary material to dislodge the findings of CIT(A). Further this issue has been considered by the Co-ordinate Bench in the case of Late Shri Sunil Dutt, father of the assessee. The assessee and Late Shri Sunil Dutt were having joint ownership of the property in the ratio of 27 73. As per the proportionate area of flats occupied by him in respect of the total area of the building i.e. undivided share, the owner of the flat will get an automatic membership in the cooperative society in proportion to the undivided share. Since cooperative society owns the total area of the land and being a member of the society, he gets the ownership of the undivided share. As per the sale deed, it is clear that assessee gets a membership on the cooperative societies, it does mean that flat owners not only owns a super structure and also ownership right on the undivided share, therefore we are inclined to accept the findings of Ld. CIT(A) in distributing the sale proceeds into sale proceeds attributable to the land and super structure - Decided against revenue.
Issues involved:
1. Assessment years 2004-05 and 2005-06 - Exemption under section 54F of the Income Tax Act, 1961. 2. Assessment year 2005-06 - Long Term Capital Gains on sale of land. Analysis: Assessment years 2004-05 and 2005-06 - Exemption under section 54F: - The appeal for the assessment year 2004-05 was time-barred by 185 days, but the delay was condoned as it was unintentional and supported by a valid explanation. - The main issue raised was the denial of exemption under section 54F of the Act. The property sold was jointly owned, and the Tribunal had previously allowed exemption for a similar case involving the assessee's father. - The Department acknowledged the Tribunal's decision regarding the exemption issue in the case of the assessee's father. - The Tribunal, after considering the facts and the previous decision, held that the assessee was eligible for exemption under section 54F of the Act, allowing the appeal partially. Assessment year 2005-06 - Long Term Capital Gains on sale of land: - The Revenue's appeal was against the CIT(A)'s decision to allow Long Term Capital Gains on the sale of land. - The issue had been previously adjudicated in the case of the assessee's father, where the Tribunal had ruled in favor of the assessee. - The Revenue failed to provide any contrary material to challenge the CIT(A)'s findings, and the Tribunal upheld the decision, dismissing the Revenue's appeal. Assessment years 2011-12 and 2012-13 - Ex-parte orders by CIT(A): - The appeals for these assessment years were decided in ex-parte proceedings by the CIT(A) due to confusion arising from restructuring within the Department. - The assessee had a prima-facie good case but failed to appear before the CIT(A) for personal hearing despite written submissions. - The Tribunal set aside the ex-parte orders and allowed the appeals for statistical purposes, directing the assessee to appear before the CIT(A) for denovo adjudication after affording a reasonable opportunity of hearing. In conclusion, the Tribunal partially allowed the appeal for assessment years 2004-05, dismissed the appeal for the assessment year 2005-06, and allowed the appeals for assessment years 2011-12 and 2012-13 for statistical purposes.
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