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TMI Blog2015 (2) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... see Mr. Peter Pereira was having share of 77% in the said house. From the agreement, the A.O. observed that the assessee was to receive three more flats i.e. two flats having a carpet area of 1200 sq.ft. each and one flat having carpet area of 750 sq.ft. and three parking spaces (two stilt and one open) as part of additional consideration. However, the additional consideration was not shown as part of the total consideration received by the assessee in her computation of LTCG on transfer of the said property during the year. Further, the assessee had taken the FMV of the said property as on 1.4.1981 at Rs. 35,00,000/- on the basis of valuation report dated 3.8.2006. In view of this, vide letter dated 21.8.2009, the A.O. asked the assessee to state as under :- "1. Please provide the market value of tile additional flats and other amenities to be received by you from the builder as per the sale agreement dated 28.4.2006. Furnish copies of agreements entered by you in this respect. Please also explain why the market value of the said flats and amenities should not be added to your total consideration for sale of property during the year while computing the LTCG for the year on sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer or has constructed a new residential' house within a period of three years from the date of transfer of the house property (original). The flats (alongwith car 'parking spaces) received by the assessee in the proposed building as 'additional consideration' agreed upon in the agreement dated 28.4.2006 was over and above her share in the monetary consideration. These flats (alongwith car parking spaces) form part of consideration received by the assessee towards transfer of the property. This flat is neither purchased by the assessee nor constructed by her. The A.O. held that since the assessee has not fulfilled the conditions laid down in section 54, she is not eligible for exemption u/s.54 of the LT. Act. The A.O. has further elaborated this issue in para 10 of the assessment order wherein he has held that exemption u/s.54 of the I.T.Act is allowable only when the assessee makes an investment towards purchase or construction of a new house property within the stipulated period. Thus for availing exemption u/s.54, the assessee has to either purchase or construct a new house property. 6. In this regard, the A.O. further held that exemption u/s.54 in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer or within two years after the date of transfer or has constructed a residential house property within a period of three years after the date of transfer. The appellant has fulfilled the precondition mentioned at point Nos.(a) & (b) above was not in doubt. This was also not in dispute that the assessee had purchased new residential property by way of construction. This was because it was clear from the agreement with developer that the developer would construct the residential building on the property alienated by the assessee to the developer and handover the residential house to the assessee in consideration of the sale of original residential property. This fact is clear and unambiguous. Therefore to say that the appellant has also complied the last condition of section 54 for acquisition of new residential property. The A.O. has considered sale consideration received in cash and kindbut failed to allow the exemption u/s.54 for reinvestment of the said consideration received in kind for acquiring of new residential house properly. 5. The A.O. has misinterpreted the definition of 'purchase' held by the Apex Court in the assessee of CIT vs. T.N. Aravinda Red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty between co-owners are as follows :- Name Ratio Area in Sq.Ft. Description Mr. Peter S. Pereira 77% 2400 Flat No.301 & 302 adjacent flats @ 1200 Sq.Ft. each on 3rd floor and two Stilt car parking space. Ms Vilma M. Pereira 23% 750 Flat No.402 on 4th floor and one car parking space. The aforesaid ratio of allocation between co-owners is already on record of the AO as well as in the valuation report. Furthermore, the co-owner will get the area according to their ratio in the new residential property. Since flat no.301 & 302 are situated in the same floor and adjacent to each other and will be treated as one single residential unit for the purpose of claiming exemption u/s.54. The same view has been taken by the Special Bench of the Mumbai Tribunal in the case of ITO Vs. Ms. Sushila M. Jhaveri, (2007) 292 ITR (AT) 1 (Mumbai). 12. The issue raised by the AO is also covered by the decision of Hon'ble Delhi High Court in the case of Gita Duggal 257 CTR 208, wherein the Hon'ble High Court held as under :- "Sec. 54/54F uses the expression "a residential house". The expression used is not "a residential unit". This is a new concept introduced by the AO into the secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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