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TMI Blog2012 (2) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case are that the assessee declared income of ₹ 5,08,150/- in its return filed on 29.9.2008. The assessee sold plot no. 124, Shanti Niketan, Indore, for ₹ 73,36,000/-. The assessee after deducting the cost of acquisition claimed the capital gains at ₹ 69,46,182/- out of which the assessee claimed exemption u/s 54 on account of purchase of flat in Mascot Residency, Bangalore for ₹ 65 lacs. The assessee sold this plot on 11.1.2008. As per the Assessing Officer and in view of provisions of section 54F of the Act, the assessee was expected to purchase the residential house within two years from the date of sale of the property by 10.1.2010. It was further pointed out by him that the flat in Bangalore was purchased on 10.6.2010, therefore, the new asset was purchased beyond the prescribed limit of two years whereas the stand of the assessee is that the construction of the residential building was completed by 29.2.2008 and possession of the flat was also taken on 26.6.2008. It was claimed that allotment-cum-possession letter of the flat was issued by the developer on 26.6.2008 when the cheques were handed over because against the total cost of flat at ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus satisfying the requirements of section 54, the Tribunal was not justified in denying exemption under section 54 to the assessee." 4.4 It may be noted that even if possession was not taken on 26.06.2008 and encashment of cheques was made on 06.09.2008, even then this fact cannot be denied that the appellant paid ₹ 60 lacs and was allotted a flat which within 8 months of sale of "old asset". Hence the total exemption cannot be denied in view of authoritative judgment from Hon MP High Court as aforesaid. 4.5 However, since on admitted facts the balance amount of ₹ 5 lacs was paid by the appellant after that expiry of period of two years from the sale of 'old asset', the A.O. is directed to restrict the claim of exemption to the extent of ₹ 60 lacs and the denial of exemption u/s 54 of the Act is restricted to ₹ 5 lacs only." In view of the aforesaid finding of the learned Commissioner of Income Tax (Appeals), we are supposed to analyse the relevant provisions of the Act which are reproduced hereunder :- "Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.28 54F. (1) 29[Subject to the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is chargeable under the head "Income from house property", other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head "Capital gains" relating to longterm capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of subsection (1) shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred.] 35[(4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order that the new asset (Flat at Banglore) was made available well before December, 2009 which was sold through a registered sale deed. The assessee also furnished a certificate from the Bangalore Municipal Corporation evidencing electric connection bills for the period from January, 2008 to May, 2008. In view of these facts, we are not in agreement with the conclusion drawn by the learned Assessing Officer that the sale agreement was registered beyond the period of two years, therefore, the assessee is not entitled to exemption u/s 54F of the Act. So far as the reliance on the decision in the case of Shashi Sharma v. CIT; 224 ITR 106 (MP) is concerned, we are of the considered opinion that it favours the assessee. We are usefully reproducing hereunder the relevant portion from the order of the Hon'ble jurisdictional High Court :- "Held, that the Central Board of Direct Taxes had issued Circular No. 471 dated October 15, 1986, stating that cases of allotment of flats under the self-financing scheme of the Delhi Development Authority shall be treated as cases of construction for the purpose of capital gains. Section 54 of the Act says that within two years of sale th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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