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2024 (2) TMI 1042 - AT - Income TaxLTCG - Denial of exemption u/s 54 - assessee has not purchased any new property within the time specified in the provision of Section 54 - HELD THAT - In the present case, as per the Agreement dated 18/02/2014, the Assessee has been given full right to use, to hold, enjoy, sell, mortgage the Property to be purchased by the Assessee. On the other hand, the first party will not have any right, title or interest over the said property. It is also obverted that as per the Assessee, the new Flat was purchased by sale endorsement dated 18/02/2014, but later on contended that the Assessee has purchased Bare-Shell flat on 13/08/2016, which is not supported by any of the documents. On the contrary, the Assessee has entered into Agreement to Sell on 18/02/2014 which itself given with certain absolute rights to the assessee as mentioned above. For the purpose of claiming the benefit u/s 54 of the Act, within a period of one year before or two year after the date of transfer of old house, the tax payer should acquire another residential house or should construct a residential house within a specified period of three years from the date of transfer of old house. Considering the fact that assessee has not fulfilled either of the conditions mentioned in Section 54 of the Act, we find no error or infirmity in the orders of the Lower Authorities in denying the benefit of deduction to the assessee u/s 54 - Decided against assessee.
Issues involved:
The issues involved in the judgment are the denial of exemption claimed under Section 54 of the Income Tax Act, 1961. Issue 1: Denial of exemption under Section 54 The appellant challenged the order of the Commissioner of Income Tax (Appeals) upholding the total income of the appellant at Rs. 1,39,60,530/- instead of Rs. 1,04,01,920/- declared by the appellant, claiming deduction under Section 54 against long-term capital gains. The appellant argued that the new property was purchased within the specified time period, and the addition made by the Assessing Officer was incorrect. The appellant sought deletion of the addition, contending that it was bad in law. Issue 2: Disallowance of deduction claimed under Section 54 The Commissioner of Income Tax (Appeals) confirmed the addition made by the Assessing Officer amounting to Rs. 35,58,612/- under Section 54 of the Income Tax Act, 1961. The appellant contended that the disallowance was made without appreciating the submissions and should be deleted as it was bad in law. Issue 3: Alleged unaccounted income received under the garb of exempted Long-Term Capital Gains The Commissioner of Income Tax (Appeals) confirmed the addition of Rs. 35,58,612/- under Section 54 of the Income Tax Act, 1961, on account of disallowance claimed by the appellant. The appellant argued that the addition was not justified and should be deleted as it was bad in law. Issue 4: Violation of conditions of Section 54 of the Act The Assessing Officer disallowed Rs. 35,58,612/- as the appellant did not fulfill the conditions of Section 54 of the Act. The appellant contended that the possession of the new property was received before completion, and substantial construction activities were undertaken, making them eligible for the deduction under Section 54. Judgment Summary: The appellate tribunal dismissed the appeal filed by the appellant against the order of the Commissioner of Income Tax (Appeals) regarding the denial of exemption claimed under Section 54 of the Income Tax Act, 1961. The tribunal found that the appellant did not fulfill the conditions specified in Section 54, as the new property was not purchased or constructed within the required time frame. The tribunal upheld the decision of the lower authorities in denying the benefit of deduction to the appellant under Section 54 of the Act. The tribunal concluded that there was no error or infirmity in the orders of the lower authorities and therefore dismissed the appeal.
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