9911796707
TMI Blog2012 (8) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Judicial Member This is an appeal by department against the order of ld. CIT(A) relating to assessment year 2008-09. 2. The department is objecting in allowing benefit of section 54F of the Act amounting to Rs. 1,20,50,000/- incurred for purchase of agriculture land. It is also mentioned in the grounds of appeal that no evidence in respect of construction of residential house was on record. Therefore, the ld. CIT(A) was not justified in allowing the benefit. The department has also taken a ground that assessee has not constructed any house property within 3 years from the date of agreement i.e. 19.11.2007. They have also stated that assessee has not furnished any evidence of construction of house property till the date of assessment i.e. 06.12.2010. The department has also taken a ground that allowing the benefit under section 54F in view of CBDT Circular No. 667 dated 18.10.93 which is not applicable on the facts of the case. 3. The brief facts of the case are that return declaring total income of Rs. 12,19,721/-was filed by assessee. During the year the assessee declared long term capital gain and claimed exemption under section 54F, which was disallowed by AO wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the transfer took place purchased, or has within a period of three years after that date constructed a residential house. In view of the above provision of sec. 54 F assessee is not entitled for deduction of exemption from long-term capital gain u/s 54F also. Therefore, the difference of capital gain as offered by assessee and as calculated after disallowance of exemption is added to the total income of the assessee." 4. Assessee preferred appeal before ld. CIT(A). Detailed submissions were filed before ld. CIT(A) which are tabulated in his order in para 3.2 at pages 2 to 4 as under :- "That assessee has sold out of property at Jaipur and claimed exemption u/s 54 of IT Act of Rs. 1,20,50,000/- and ld AO has disallowed the claim on the plea that land purchased for construction of residential house was agricultural and was not registered. That assessee has purchased land in Deepak Nagar Yojna and agreement was executed for the purchase of property and was submitted before ld. A.O. There was some dispute and matter was sub judice but possession was taken immediately. That it is nowhere necessary that invested for construction house is to be made in non-agriculture land a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 followed. Similar views regarding registration of property was expressed in Balraj v. Commissioner of Income-tax [2002] 173 CTR (Delhi) 452 : [2002] 254 ITR 22 (Delhi) [2002] 123 Taxman 290 (Delhi) and held that assessee purchased a property within one year of sale of his residential house later transaction not evidenced by registration thereof as provided under s. 17 of Registration Act. For claiming exemption under the provisions of s. 54, it is not necessary that the assessee should become the owner of the property purchased by him hence, registration of document is not imperative Assessee entitled to exemption under s. 54 CIT v. TN. Aravindra Reddy [1997] 12 CTR (SC) 423 : [1979] 120 JTR 46 (SC) TC 22R 251 followed, CIT v. Podar Cement (P.) Ltd [1999] 14 CTR (SC) 67 : [1997] 226 JTR 625 (SC) : (TC) 40.3564 Mysore Minerals Ltd. v. CIT [1999] 156 CTR (SC) 1 : [1999] 239 JTR 775 (SC) and CIT PR.L. Sood (201) 165 CTR (Delhi) 458 [2000] 245 JTR 727 (Delhi) relied on. It was also held in Commissioner of Income-tax v. Smt Kanta Devi Saraf [2002] 172 CTR (Cal.) 322 : [2002] 254 JTR 317 (Cal.) : [2002] 125 Taxman 215 that exemption under Section 54F Purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction should be completed within three years from the date of transfer of original assets. The requirement of section 54F is that property should be a residential house. The use of the property is not the relevant criterion to consider the eligibility for benefit of section 54Fof the IT Act. Mahavir Prasad Gupta v. CIT [2006] 5 SOT 355 (Delhi). Even a farmhouse can be a residential house and investment is eligible for benefit of section 54F of the IT Act. Shyam Sunder Makhija v. ITO [1991] 38 ITD 125 (JPR) Purchases though unregistered would still be eligible for reinvestment benefit. CIT v. Mrs. Shahzada Begwn [1988] 173 ITR 397(AP) It is, therefore, requested that looking to these facts appeal may kindly be allowed." Thereafter, the ld. CIT(A) after considering the submissions, order of the AO and various decisions i.e. in case of CIT v. Vishnu Trading Investment Co. [2003] 259 ITR 724/128 Taxman 777 (Raj.) and in case of Addl. CIT v. Narendra Mohan Uniyal [2009] 34 SOT 152 (Delhi) and in case of Shyam Sunder Mukhija v. ITO [1991] 38 ITD 125 (JP) held that assessee is eligible for exemption under section 54F. The finding of ld. CIT(A) have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, however, he got inspected the house through his Inspector. The assessee was not asked to file the valuation report of the house. Therefore, he has not filed. All these details were filed before ld. CIT(A) who after examining the facts, who is a senior authority has allowed the issue in favour of the assessee as per provisions of law and as per various decisions of Hon'ble Jurisdictional High Court and other Benches of Tribunal. Accordingly, the order of ld. CIT(A) does not suffer from any infirmity. 8. We have heard rival submissions and considered them carefully. After considering the material on record, we find that there is no infirmity in the order of ld. CIT(A). The AO has examined the agreement of purchase of plot. The assessee has sold a property for a consideration of Rs. 5,60,00,000/- and assessee has purchased a property from Shri Ram Richpal Agarwal and Shri Beni Gopal Agarwal at Deepak Nagar Yodna property. This land was purchased consisting of 3300 sq. yards which is a part of agricultural land. The rate of land was Rs. 4550/- per sq. yard. Rs. 10,00,000/- was given in advance on 19.11.2007. An agreement was entered, copy of the same was filed before the AO. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny new house either one year before or two years after the transaction. Third condition is construction of the house should be completed within 3 years from the date of transfer and this condition was satisfied as explained by ld. CIT(A). The Board Circular No. 667 dated 18.10.93 was also taken into consideration by ld. CIT(A) whereby it was clarified that for the purpose of computing exemption under section 54 or 54F, the cost of the plot together with cost of the building will be considered as cost of new asset, provided the acquisition of the plot and also the construction thereon are completed within the period specified in these sections. These conditions were found satisfied by the ld. CIT(A) and, therefore, he has allowed the exemption to the assessee. We have seen a copy of valuation report which was obtained on 17.3.2011 and it is found that as per this report the house was constructed by assessee and the valuation of the construction is Rs. 16,29,600/-. It means, the exemption claimed by assessee which was at Rs. 1,20,50,000/- only. This consideration was paid for the purchase of plot and Rs. 16,29,600/- was also invested in construction of house of which the assessee has ..... 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