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TMI Blog2015 (8) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee can be said to have complied with the requirement of section 54 of the Act; and, the exemption has been incorrectly denied by the lower authorities. As a matter of passing, we may also mention here the reliance placed by Ld. Representative of the assessee on the decision of our Coordinate Bench in the case of Shri Khemchand Fagwani vs. ITO, [2015 (8) TMI 1019 - ITAT MUMBAI] wherein also claim of exemption under section 54 of the Act was allowed under similar circumstances. In the light of the precedent, we find no reason to deny the claim under section 54 of the Act. - Decided in favour of assessee. - I .T.A. No. 7512/Mum/2013 - - - Dated:- 19-8-2015 - SHRI G. S. PANNU AND SHRI SANJAY GARG, JJ For The Appellant : Dr. K. Shivram and Shri Rahul R. Sarda For The Respondent : Shri Jeetendra Kumar ORDER PER G. S. PANNU, A. M: The present appeal is preferred by the assessee and is directed against the impugned appellate order dated 21/11/2013 passed by Ld. CIT(A)-31, Mumbai pertaining to the assessment year 2010-11, with reference to the assessment order dated 03/01/2013, passed in terms of section 143(3) of the Income Tax Act, 1961(the Act). 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed the exemption claimed under section 54 of the Act. The assessee unsuccessfully carried the matter in appeal before CIT(A), who also sustained the conclusion drawn by the Assessing Officer. The CIT(A) concluded that for the purpose of section 54 of the Act the term purchase cannot be equated to giving of advance . Furthermore, CIT(A) observed that though assessee had parted with money, but he did not acquire possession or domain over the new residential house and, therefore, the denial of the claim of exemption under section 54 of the Act was affirmed. 5. In the above background, Ld. Representative for the assessee vehemently pointed out that the claim of the assessee has been unjustly denied by the lower authorities. It has been pointed out that assessee had duly invested the amount in acquisition of a new residential property and the delay in completion of construction by the builder was beyond the control of the assessee. It was pointed out that assessee had furnished the allotment letter in respect of the specific flat allotted by the builder and a copy of the same was also placed in the Paper Book at pages 7 to 10. It was emphasized that complete amount of considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it has fulfilled the requirements of section 54 of the Act because he has paid ₹ 1.00 crore to the builder for acquisition of flat and the builder has issued an allotment letter in respect of the specific Flat being, Flat Nos. 1 2 on 4th Floor in C-Wing, Ramniwas Building, Malad (E). 7.1 The controversy is as to whether under these facts assessee can be said to have purchased the new property so as to entitle him for exemption in relation to the amount spent towards the new property under section 54 of the Act. It is not disputed by the Revenue that the sum of ₹ 1.00 crore has been invested by the assessee towards acquiring new property. Of course, the legal title in the said property has not passed or transferred to the assessee within the specified period and it is also quite apparent that the new property was still under construction. So however, the allotment letter by the builder mentions the flat number and gives specific details of the property. 7.2 In this context, the Hon ble Delhi High Court in the case of Kuldeep Singh (supra) has explained the meaning of the expression purchased in the context of section 54 of the Act in following words:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iginal asset i. E. new house has been purchased on 30th April, 2003 whereas the earlier asset was sold only on 24th September, 2004. The Supreme Court allowing the appeal noticed that the agreement to sell was executed on 27th December, 2002 but the sale deed could not be executed because of inter-se litigation between the legal heirs, as one of them had challenged the will under which the assessee had inherited the property. The agreement to sell, it was held had given some rights to the vendor and reduced or extinguished rights of the assessee. This, it was observed was sufficient the purpose of Section 2(47), which defines the term transfer in relation to a capital asset. In the light of the factual matrix, it was observed that the intention behind Section 54 was to give relief to a person who had transferred his residential house and had purchased another residential house within two years of transfer or had purchased a residential house one year before transfer. It was only the excess amount not used for making purchase or construction of the property within the stipulated period, which was taxable as long term capital gain while on the amount spent, relief should be granted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of three years from the date of the transfer of the original asset expires. The aforesaid provisions also does not justify the action of the Assessing Officer in denying the claim of exemption under section 54 in the instant assessment year. 7.4 In view of the aforesaid discussion and on the basis of material and evidence on record, we find that the assessee can be said to have complied with the requirement of section 54 of the Act; and, the exemption has been incorrectly denied by the lower authorities. As a matter of passing, we may also mention here the reliance placed by Ld. Representative of the assessee on the decision of our Coordinate Bench in the case of Shri Khemchand Fagwani vs. ITO, ITA No.7876/M/10 order dated 10/09/2014, wherein also claim of exemption under section 54 of the Act was allowed under similar circumstances. In the light of the precedent, we find no reason to deny the claim under section 54 of the Act. We direct accordingly. 8. At the time of hearing, Ld. Representative of the assessee has referred to an additional Ground of appeal relating to levy of interest under sections 234A, 234B 234C of the Act. Since assessee has been allowed relief ..... X X X X Extracts X X X X X X X X Extracts X X X X
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