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TMI Blog2016 (2) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee Exemption claimed u/s 54 in respect of cost of construction of the new house in finishing the house - Held that:- Having regard to the evidence and payment having been made to discharge the said bill, in the absence of any evidence to the contrary, there is no justification to restrict the claim to ₹ 4 lakhs on estimate basis. In Saleem Fazelhoy v. DCIT (2006 (6) TMI 139 - ITAT BOMBAY-G ), it was held that expenditure incurred on making house habitable is considered as investment in purchase of house, and hence deduction u/s 54F of the Act is allowable. In the another case in Mrs. Gulshanbanoo vs. JCIT (2002 (1) TMI 1296 - ITAT MUMBAI), it was held that cost of new house for the purpose of section 54, include not only cost of purchase of new house but also includes other necessary expenditure to make house habitable. Ld. Counsel also relied on the Order of the Ahmedabad Bench in the case of Shri Srinivasa R. Desai [2014 (1) TMI 883 - ITAT AHMEDABAD]. The assessee after purchasing the flat has incurred further cost which are in the nature of cost of construction and it has been held that the cost so incurred will form an integral part of the qualifying investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee sold her 1/4th share in the residential house at B-30, Geetanjali Enclave, New Delhi - 110 030, under a sale deed dated 05.09.2006 for a consideration of ₹ 49,50,000/- and declared long term capital gain of ₹ 43,27,615/-. In respect of this above gain, the assessee claimed exemption of ₹ 20,40,600/- under section 54 of the Act on the ground that she has purchased a new house property at Ramprastha, Ghaziabad. The AO, however, observed that the said property which was purchased was on 04.10.2005 i.e. before a period of one year, which is before the date of sale of her share in the residential property i.e. 05.09.2005. The assessee in respect of the above observation of the AO contended that she had entered into an agreement to sell dated 06.04.2006 and, therefore, the claim was in accordance with section 54 of the Act. However, the AO disagreed with the said contention of the assessee and rejected her said claim. On appeal by the assessee, the CIT (A), however, turned down the appeal and upheld the disallowance on the ground that there are many glaring contradictions as well as inconsistencies in the argument and documents presented by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Nitin Gupta, and Ms. Seema Gupta relinquished/released all their rights, titles, interests, claims and shares in the said property in favour of their mother Smt. Shashi Gupta on 29.03.2000. (f) Smt Pushpa Aggarwal, Smt Phool Gupta, Smt Veena Gupta and Smt Suman Gupta, relinquished / released all their rights, titles, interests, claims and shares in the said property in favour of Shri Mahendra Prakash Gupta, Shri Shiv Prakash Gupta, Shri Ram Prakash Gupta and Smt. Shashi Gupta on 29.03.2000. (g) Accordingly the said property mutated, transferred and substituted in the joint names of Shri Mahendra Prakash Gupta, Shri Shiv Prakash Gupta, Shri Ram Prakash Gupta and Smt. Shashi Gupta and each member has 1/4th undivided share. (h) All the four Co-owner having equal share agreed to sell the said property to Shri Ramesh Chandra Kalra s/o Shri K. L. Kalra, B-49, Shivalik Colony, New Delhi and Shri Ashish Rajpal s/o Shri G. D. Rajpal, B-1/53, Malviya Nagar, New Delhi-17 for a sum of ₹ 1.98 Crores and as per the terms and conditions mentioned in agreement dated 16.04.2006 copy of the same at page 77 to 79 of the paper Book. The relevant para of the agreement is reproduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir nominee(s). (i) The assessee had share in the property B-30, Geetanjali Enclave, New Delhi-30 which was sold to Sh. Ramesh Chander Kalra vide agreement dated 16.04.2006. She has already received an advance of ₹ 20,00,000/- vide cheque number 759207 on 16.01.2005 drawn on ICICI Bank, Saket, New Delhi as part consideration for her share in the property. (j) The sale deed could not be registered because of family dispute and the balance consideration could not be received. The assessee had purchased a new residential house property B- 195, Ramprastha Surya Nagar, Gaziabad for ₹ 20,00,000/- + 40600/- vide registered deed dated 04.08.2005. Therefore the money received from Sh. Ramesh Chandra Kalra as part sale consideration was invested in purchase of new house property B-195, Ramprasta Surya Nagar, Gaziabad. (k) As already mentioned above, vide agreement dated 16.04.2006 all the family member (Four member having equal share in the property B-30, Geetanjali Enclave, New Delhi) agreed to sell the said property to Sh. Ramesh Chandra Kalra s/o K. L. Kalra, R/o B-49, Shivalik Colony, New Delhi and Shri Ashish Rajpal S/o Sh. G. D. Rajpal, R/o B-1/53, Malv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of residential house is held to be not entitled to exemption under section 54 of the Act, on the ground that such purchase of property at Ghaziabad happened one year prior to the sale of her share in the residential property at B-30, Geetanjali Enclave, New Delhi - 110 030. The assessee, however, supported the claim on the basis of an agreement for sale dated 16.04.2006, which has not been accepted by the authorities below on the ground that such an agreement is not a genuine document. It is, however, not disputed that assessee sold her share in the property for a consideration of ₹ 49,50,000/- which was received in the following manner :- (i) Received cheque no.759207 dt. 16.01.2006 Rs.20,00,000/- (ii) Received DD no.039172 dt. 04.09.2006 Rs.19,50,000/- (iii) Received cheque no.394334dt. 04.09.2006 Rs.10,00,000/- From the aforesaid facts, it is apparent that substantial consideration was received by the assessee even 15 months prior to the agreement of sale dated 06.04.2006. Moreover, the agreement dated 16.04.2006 is signed by all the four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and Smt. Shashi Gupta and others for purchase of share of her portion in the house located at B-30, Geetanjali Enclave, New Delhi. 2. I have taken possession of share of the house as on 16.4.2006 against consideration as agreed upon detailed in the sale agreement dt.16.4.2006. 3. That I have option to get the sale deed executed in my name or in the name of my nominee as per cl.2 of the referred agreement. The observation of CIT (A) that in the sale deed, the possession of the property was taken on 05.09.2006 cannot be seen in isolation because in the agreement to sale on 16.04.2006 suggested by the affidavit of the Vendee clearly buttress the claim of the assessee, that she has handed over her share of the property to Vendee. Having regard to the above factual position, we are of the opinion that possession of the property stood handed over on 16.04.2006. Furthermore on facts of the case, the Hon'ble Apex court held that registration of the transfer in accordance with the agreement to sale cannot be termed as the date of transfer as envisaged by Section 50C read with section 2(47) of the Act (Sanjeev lal Anr. Vs. CIT Anr. (2014) 365 ITR 389(SC)), whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproach, the Hon ble Apex Court in Sanjeev lal Anr. Vs. CIT Anr. (supra) has held as above. Thus, in view of the aforesaid, we allow the ground raised by the assessee. 9. Ground No.3 relates to exemption claimed by the assessee u/s 54 of the Act in respect of an amount of ₹ 933950/- representing cost of construction of the new house in finishing the house which was not allowed by the AO on the reason that the said house was purchased beyond the period of one year before the sale of the old house. 10. The ld. CIT (A) had held in respect of the above claim as under :- The assessee further claimed that it had incurred ₹ 9,33,950/- to make the house purchased habitable one and therefore in computation, benefit of investment of ₹ 9,33,950/- should be given. Since entitlement of exemption u/s 54 has already been denied; this ground of appeal is discussed on merits only as an alternative scenario; in case, benefit of section 54 is allowed to the assessee for any reason. The A.O. has mentioned the nature of work done in the assessment order itself on page 5. I find that many aspects for example, marble flooring, part of wood work, POP work, part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loor 11,500/- 3. Tile work with material 35,150/- 4. Wood work (with material) 1,12,500/- 5. Pop Work in Bed Room, Dining Room in Kitchen etc. 67,100/- 6. Wall Finish Internal, Cement Plaster with Plastic Emulsion 61,200/- External -Sand Face Synthetic 20,000/- Paint on Door Window (with material) 12,000/- 7. C.P. Fitting with 2 Kitchen and 6 Bathroom steel sink Ceramic Sink and water storage tank 72,500/- 8. Conduit pipe fitting with copper wire standard quality TV and Telephone wiring and fitting 70,000/- 9. Hot Cold water fitting with Aqua guard 25,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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