9911796707
TMI Blog2019 (1) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1961 Act and further investment of ₹ 21,50,000/- was made by the assessee in eligible NHAI Bonds in the immediately succeeding financial year, but within a period of six months from the date of transfer. The deduction u/s 54EC was rightly allowed by the AO for an aggregate amount of ₹ 71,50,000/- as the amendment to Section 54EC was brought by Finance Act, 2014 w.e.f. 01.04.2015 which restricted/capped the deduction u/s 54EC to a maximum sum of ₹ 50,00,000/- for investment made in qualified bonds during the year in which transfer took place as also by including investment in eligible bonds in immediately succeeding year. On the both the issues on which learned Pr. CIT invoked provisions of Section 263, it could not be said that the assessment order dated 20-10-2015 passed by the AO u/s 143(3) of the 1961 Act was erroneous so far as prejudicial to the interest of Revenue calling interference u/s 263 of the 1961 Act. Thus, not only did the AO made proper inquiry with respect to correctness of claim of computation of capital gain filed by the assessee but also applied law correctly by allowing the said claim(s) of the assessee in the return of income filed wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the objections of the appellants. The appellant caves leave to add, alter, amend or delete all or any of the grounds of appeal at any time. 3. The brief facts of the case are that the assessee is engaged in providing consultancy services in the name and style of M/s S.V.Services. During the year under consideration, the assessee derived income from House Property, Business or Profession, Capital Gains and from Other Sources in the form of bank interest. The assessee filed return of income with Revenue on 30.07.2013 declaring total income of ₹ 8,17,590/- and assessment was framed by Revenue u/s 143(3) of the 1961 Act, vide assessment order dated 20.10.2015 wherein returned income of the assessee was accepted by the Revenue, details of which are as hereunder:- I Income from House Property (As per statement) 3,91,978 II Profits/Gains from Business/Profession (As per statement) 3,15,838/- III Long Term Capital Gain (As per statement) 15,982/- IV Income from Other Sources (As per sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was to get consideration from the developer of ₹ 40 lacs on monetary terms as well four residential flats on ownership basis free of cost and six car parking s free of cost. The ld. Pr. CIT observed that the detail/description of the said four residential flats ( Flat No. 701, 702, 1001 and 601) are given in the said registered development agreement entered into by the assessee along with other co-owners with Honest Infra . The said development agreement was registered with Sub-Registrar Kalyan on 10.01.2013 and as per index-II, the consideration was shown as ₹ 3,13,75,216/- on which stamp duty was paid and the same was distributed between the aforesaid three co-owners as detailed hereunder:- Vendor-1 Gautam U Divadkar Rs.53,12,500/- (1flat + ₹ 20,00,000/-) Vendor-2 Shilpa A Varde (assessee) Flat no -701 Rs.22,43,750/- Flat no -702 Rs.22,43,750/- Flat no-1001 Rs.23,87,500/- Flat no -601 Rs.23,87.500/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith aforesaid directions. 5. Aggrieved by the order dated 12-03-2018 passed by learned Pr. CIT u/s 263 of the 1961 Act, the assessee filed an appeal with the tribunal. Ld. Counsel for the assessee vehemently submitted that several written replies were furnished during the course of assessment proceedings conducted by the AO u/s. 143(3) r.w.s. 143(2) in response to the queries raised by the AO, which culminated into an assessment order dated 20.10.2015 passed u/s. 143(3) wherein assessee claim of computation of long term capital gain was accepted by the AO. Our attention was drawn to page 31 of paper book wherein all details related to this development agreement was submitted which included valuation report, development agreement, copies of bonds for claiming deduction u/s 54EC for investments made in the bonds, working of capital gains etc.. The assessee has filed paper book containing 159 pages which, interalia,contained copy of development agreement, copies of replies filed before the AO and copies of submissions made before learned Pr. CIT. The said paper book is placed in file. Our attention was drawn to page 129-131/paper book wherein note on long term capital gains is plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flats which are not yet constructed which is not permissible. It was submitted that even construction of the building by the developer did not started till the end of the previous year as these are future properties to be constructed and no deduction u/s 54F can be allowed. 7. We have considered rival contentions and perused the material on record including case laws cited by the rival parties. We have observed that the assessee is in the business of providing consultancy services. The assessee is co-owner of property along with her brother and sister, of land bearing number CTS 2878A ( earlier CTS 2878, 2879, 2880, 2881, 2882 and 2911) totally admeasuring 4960 square meters along with two structures standing thereon named as Sadashiv Niwas and New Divadkar Building consisting of ground+ two upper floor and ground+one upper floor at Shivaji Chowk, Agra Road, Kalyan within limits of Kalyan-Dombivili Municipal Limits. The assessee along with other co-owners entered into an registered agreement dated 31.12.2012 with M/s. Honest Infra ( hereinafter called Developers ), for development of their aforesaid property. The said agreement was registered on 10.01.2013. The assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 702 within provisions of Section 54F of the 1961 Act on the grounds that the said flats are not even being constructed by the developer Honest Infra and they are future properties, thus the assessee is not entitled for deduction u/s 54F. The assessee has also claimed deduction of ₹ 71,50,000/- on account of investments made in NHAI bonds which were otherwise eligible for deduction u/s 54EC of the 1961 Act. The assessee invested ₹ 50,00,000/- on 14.03.2013, ₹ 18,50,000/- on 11.06.2013 and ₹ 3,00,000/- on 26.06.2013 in NHAI bonds which were eligible for deduction u/s 54EC. The evidences are placed in paper book/page 100-105 filed with tribunal to support contentions that in aggregate ₹ 71,50,000/- was invested in NHAI Bonds which were otherwise eligible for deduction u/s 54EC of the 1961 Act. The said investment was made within six month from the date of transfer and was made in two successive financial year, firstly in the previous year relevant to the year when the transfer took place i.e. ₹ 50,00,000/- while the balance ₹ 21,50,000/- was invested in immediately succeeding year. The AO allowed deduction of ₹ 71,50,000/- u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration under the said development agreement from the developer Honest Infra as her share of consideration under development agreement dated 31.12.2012. The four new residential flats bearing numbers 701, 702, 1001 and 601 in the building are to be constructed on said property by the developer, thus, what the assessee is to get from developers are yet to be built new residential flats bearing flat no. 701, 702, 1001 and 601 in the building proposed to be constructed by Honest Infra under the said registered development agreement dated 31.12.2012, these flats were allotted specifically by the developer in favour of the assessee under development agreement which entitled assessee to sell, dispose of or even create charge on these flats. Thus, effectively it could be said that the share of consideration in lieu of property for development given by the assessee to the developer, to the extent of these four residential flats is retained by the builder which will be invested by the developer by utilising its own funds for constructing these flats on behalf of the assessee. This effectively means that consideration under the development agreement dated 31.12.2012 which other wise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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