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TMI Blog2014 (6) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... concern into a Limited Company as Short Term Capitals Gains without appreciation the provisions of Sec.47(xiv) of the I.T. Act, 1961, without appreciating that the Goodwill was self generated and also without considering and distinguishing the case laws relied upon by the Appellant. On the facts and circumstances of the case and law the learned Commissioner of Income Tax -Appeal (CIT-A) erred in not allowing the claim of deduction u/s 54 of the I.T. Act, 1961. On the facts and circumstances of the case and law the learned Commissioner of Income Tax-Appeal (CIT-A) erred in not allowing the claim of interest on housing loan claimed u/s 24(b) of I.T. Act, 1961. 3. Apropos Ground No. 1, the relevant facts are that the assessee, an individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the good will is covered by the exemption u/s 47(xiv) of the Act as the assessee did not receive any direct benefit other than the allotment of shares in lieu of transfer of good will which is fictitious and notional asset. However, the said contention was not accepted by the AO on the reason that the good will was never created in the books of propriety concern of the assessee and therefore, it never became the asset of OPM. Also, the good will was not the part of the assets of the propriety concern, M/s. OPM and therefore, the transfer cannot be exempted u/s 47(xiv) of the Act. Accordingly, the AO held that the assessee was liable to pay capital gain tax on the short term capital gain of Rs.2,29,84,701/- arising on the transfer of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-15 of the said agreement which specifically deals with the particulars of immovable and movable assets to which the assignor is entitled does not contain any detail as to the valuation of the good will possessed by the assignor while arriving at a total value of Rs.3,35,90,640/- for which the allotment of 3,35,90,64/- shares of Rs.10 each paid in share capital of the assignee. Though the general wordings contained in the recitals of the said agreement in para 5 as reproduced above covers 'good will' for the transfer of which negotiation has taken place between the assignor and assignee, the assignment deed does not evidence that a good will, valued at Rs.2,29,89,701/- is transferred to the assignee. Moreover, it is not disputed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Co-operative Housing Society, JVPD, Mumbai for sale consideration of Rs.2,40,00,000/-. After reducing the cost of acquisition of Rs.7,87,607/-, LTCG of Rs.2,32,12,393/- was worked out. The assessee claimed deduction u/s 54 of Rs.98,20,083/- being an investment in a new house property purchased. On verification, the AO found that the said property was purchased on 26.05.2006, while the original property was sold vide agreement dated 11.09.2008 and hence the acquisition of the property, according to the AO, was beyond the time provided under section 54. Further, the new property was jointly owned by the assessee and his wife while the original property was purchased in the assessee's name only. In the agreement, the wife was the first holde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the acquisition of the new property. The AO verified the bills and found the same to be for petrol refilling and acquisition of personal assets like Refrigerator, washing machines, etc. These personal expenses do not qualify for cost of improvement of the new property. Some of the expense, the AO, held that can be claimed at the time of the sale of the new property, but the said expenses do not qualify for deduction u/s 54 and hence the same were disallowed. On appeal, the Ld.CIT(A) rejected the claim of deduction u/s 54 and upheld the findings of the AO that the new property has not been purchased within the time limit prescribed u/s 54 of the Act. Aggrieved by the impugned decision, the assessee has raised this ground in the appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , irrespective of the date of agreement, is to be allowed. We direct and order accordingly. Resultantly, Ground No 2 is partly allowed. 5. In ground No 3, the assessee has agitated the decision of the Ld.CIT(A) in confirming action of the AO in not allowing the claim of interest on housing loan u/s 24(b) of the Act. The relevant facts are that the assessee had shown a loss of Rs.1,50,000/- being the interest paid on the borrowed capital. This interest is claimed in respect of the new house which the assessee had shown as self-occupied property. As the assessee had taken possession of the property during the FY 2008- 09, according to the AO, the assessee was entitled for the claim only after the end of Financial Year 2008-09. On appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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