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TMI Blog2016 (12) TMI 1735X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant. 2.3 The CIT(A) should have held that the order was only a repetition of the Assessing Officer's order and that there was no reasoning of his own to confirm such computation. 2.4 The CIT(A) should have held that the stress, in section 54(1) of the Income Tax Act, 1961, and the Circular No. 667 dated 18.10.1993 issued by the Central Board of Direct Taxes, was only on the word "Completed" and this can have relevance only to the construction of the building. 2.5 The CIT(A) should have, therefore, held that such stress, being on the word "Completed", would only refer to the construction of a building and cannot refer to the purchase of a plot of land. 2.6 The CIT(A) should have, therefore, held that, even if the land had been purchased at a much earlier date, as long as the construction the building thereon is COMPLETED within a period of three years from the date of sale of the old building, the appellate will be entitled to a deduction under the provisions of section 54 of the Act. 2.7 The CIT(A) erred in confusing himself with any transfer that took place on May 14, 2007, while what did take place on May 14,2007, in the appellant's case, was the purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,20,97,560/- and the Return of income was processed u/s. 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice u/s. 143(2) of the Act was issued and in compliance Ld. AR appeared from time to time and the case was discussed. The Assessing Officer on perusal of the financial statements and submissions of the assessee found that the assessee has sold Residential House Property at New Delhi on 15.01.2010 for Rs. 12,50,00,000/- and worked out the Long Term Capital gains to Rs. 10,47,95,925/- and the assessee claimed exemption u/s. 54 of the Act in respect of purchase of land and construction of the residential property at JorBagh, New Delhi, whereas, the residential property house was purchased on 14.04.2007 for a total consideration of Rs. 13,00,00,000/- including registration and stamp duty. The property was obtained with loan from HDFC Bank and assessee paid financial charges for the period of 2005-06 to 2010-11, aggregating to Rs. 2,96,46,446/-, it was explained that the assessee has demolished the House and constructed new residential property with total cost of Rs. 2,77,39,045/- and filed details. The Ld. AO find that the assessee has not complied the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act should be allowed. The Assessing Officer elaborately discussed on facts and law in the Assessment Order and found that the assessee after purchase of property has demolished and constructed new residential house and the total cost of construction worked out to Rs. 2,77,39,045/-. Where, the Ld. AR arguments that land purchased on 14.05.2007 should be part of exemption allowed u/s. 54 of the Act. The Ld. AO is of the opinion that the entire capital gain was not invested in the property before due date u/s. 139(1) of the Act nor assessee has invested in capital gain account scheme and relied on the Mumbai High Court and Tribunal decision, has excluded the purchase of land in 2007 at Jorbarg as it does not fall within the construction provisions of section 54 of the Act and made addition to the Returned income and passed Assessment Order under 143(3) dated 27.03.2013. 4. Aggrieved by the order, the assessee filed an appeal before the CIT(A). In the appellate proceedings, the Ld. AR argued the grounds and held submissions made before the Assessing Officer. The Ld. CIT(A) considered the findings of the Assessing Officer and judicial decisions and introduction of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction of property within 3 years from the date of sale of property. The Ld. AR relied on the decision of Bangalore Tribunal in the case of Sri R.M.M. Athreya Vs. Income Tax Officer, in ITA No. 467/Bang/2013, where the Tribunal considered the facts in respect of flat and allotment letter in respect of booking of flat with Delhi Development Authority and whereas, in the present case the assessee has purchased the land in the year 2007 and claim of exemption is practically not viable and does not satisfy the condition envisaged in provisions of section 54(1) of the Act. Further, we found the Assessing Officer has restricted the claim of investment in construction of residential house property made before the due date of filing the return of income under 139(1) of the Act. Whereas, the assessee has spent total cost of construction being Rs. 2,77,39,045/-. The Assessing Officer contention that the assessee should have deposited the amount in the capital gain account scheme before due date u/s. 139(1) and restricted exemption u/s. 54 of the Act to the amount of Rs. 1,14,84,067/-. 7. We are of the opinion, that there is no dispute on construction of the property and though the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property".] The assessee has complied the provisions considering the dates as under:- (i) Date of transfer of original asset : 14.02.2005. (ii) The date of filing of return : 17.03.2006. (iii) Due date of return for the Assessment year 2005-06 : 31.07.2005. (iv) Due date of filing belated return : 31.03.2007. (v) Possession of the property :. 15.12.2007 On considering the provisions of law and facts of the case, the assessee has invested H68,00,000/- before due date of filing belated return i.e. 31.03.2007 and took the possession as per the findings of the Commissioner of Income Tax (Appeals) on 15.12.2007, being within three years from the date of transfer/sale of original asset being 14.02.2005. The assessee has not inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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