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TMI Blog2019 (1) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... th the provision of Section 54F of the Act which was beyond his control. Therefore we are of the view that the assessee is very much eligible for deduction u/s 54F for the amount which has been invested by him beyond the prescribed period but before getting the registration of the property provided there was sufficient reason which prevented the assessee for making in the investment within the prescribed time. The delay occurred due to the situation beyond the control of the assessee. Thus, he is eligible for deduction u/s 54F of the Act. - we direct the AO to verify the amount invested by the assessee and allow the exemption u/s 54F of the Act for the amount invested in the property beyond the prescribed period but before the registration of the property. - Decided in favour of assessee for statistical purposes. - I.T.A. No. 296/Ahd/2014 - - - Dated:- 1-1-2019 - Shri Mahavir Prasad, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Appellant : Shri S. N. Divatia Mehul Talera, A.R. For the Respondent : Shri N. J. Vyas, Sr. D.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked out Long Term Capital Gain in respect of such property for ₹ 9,57,447/- which was claimed as exempt u/s 54F of the Act on account of investment in another property for an amount of ₹ 11,11,000/- The necessary working of the capital gain stands as under: Sale Consideration Rs.22,00,000/- (-) Index cost of acquisition Rs.12,42,553/- Long Term Capital Gain ₹ 9,57,447/- (-) Exemption u/s 54F Rs.11,11,000/- Long Term Capital Gain Nil However, the AO during the assessment proceedings observed that the property purchased was registered in the name of the assessee vide dated 10.10.2011 which is beyond the period prescribed under the provision of Section 54F of the Act. Accordingly, the AO denied the exemption claimed by the assessee u/s 54F of the Act. Thus, the AO made the addition as Long Term Capital Gain of ₹ 9,57,447/- to the total income of the assessee. 5. Aggrieved, assessee preferred an appeal to Ld CIT(A). The assessee before the Ld. CIT(A) submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsaction of sale of land co owned with two other person and despite the fact that appellant's original return of income is presently before the Hon'ble ITAT but this issue was not there. The A.O. after receipt of credible information, recorded satisfaction and after taking statutory approval, issued notice u/s 148 of the Act. The appellant also filed return in response to this notice u/s 148 of the Act though beyond the time limit as granted by A.O. in the notice. The appellant reflected the transaction of sale of land resulting into long term capital gain but claimed deduction u/s 54F of the Act for an amount of ₹ 11,11,000/- invested in a house property. Though A.O. treated this return of income as non-est but taken computation of income from the same return of income. The appellant filed all the details before A.O. as asked (admitted by A.O. in impugned order and accepted the transaction of sale of land at ₹ 66 lacs with 1/3rd share of appellant at ₹ 22 lacs. The A.O. also accepted the appellant's share for cost of acquisition (indexed) at ₹ 1242553 to workout long term capital gain at ₹ 957447/-. The A.O. also not doubted about transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the provisions of sec. 54 of the IT. Act, it is not necessary that the assessee should become the owner of the property. Sec. 54 of the Act speaks of purchase. Hon'ble high court relied on supreme court judgment in the case of CIT Vs. T. N. Aravinda Reddy (1979) 120 ITR 46 where it has been held that The word purchase occurring in section 54(1) of the Act had to be given its common meaning viz. buy for a price or equivalent of price by payment in kind or adjustment towards a debt or for other monetary consideration. It is therefore, following the finding as discussed above and ratio of various case taws, the appellant is entitled for deduction u/s 54F of the Act for the investment of ₹ 11,11,000/- for a residential property. But, as per the provisions of section 54F, the deduction available u/s 54F of the Act will be in the proportion out of long term capital gain, which the investment in new evidential property bears with total sale consideration. The appellant's total consideration was undisputedly of ₹ 22,00,000/- and long term capital gain is of ₹ 9,57,447/-. It is therefore for the investment of ₹ 11,11,000/- the available ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s 54F of the Act. It is a fact on record that the assessee before the AO claimed to have invested ₹ 11.11 lacs. However, the assessee before the Ld. CIT(A) claimed the first time to have made the payment of ₹ 19.34 lacs out of which a sum of ₹ 8,34,000/- was paid in April May 2011, i.e. the date beyond the period of three years but before getting the registration of the property. From the above, it is clear that the assessee has never filed anything about the payment of ₹ 8.34 lacs before the AO. Therefore, the same needs to be verified by the AO. 9. The next issue arises whether the assessee is eligible for deduction u/s 54F of the Act for the payment made beyond three years. 10. In this regard, we note that there was a delay on account of some dispute in the property which prevented the assessee from investing the money within the time as specified under section 54F of the Act. Thus, it is clear that the assessee could not comply with the provision of Section 54F of the Act which was beyond his control. Therefore we are of the view that the assessee is very much eligible for deduction u/s 54F of the Act for the amount which has been invest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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