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TMI Blog2019 (1) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... property there was delay in execution of final sale deed as elaborated supra in this order. We consider that the assessee has only invested an amount of ₹ 30 lacs as explained above in this order within the stipulated period prescribed in the provision of section 54F of the act, therefore, we restrict the deduction u/s. 54F of the act to the amount of ₹ 30 lacs as final agreement could not be executed because of unavoidable circumstances in the form of pending legal proceedings due to sudden demise of the first party seller of the property. Accordingly the appeal of the assessee is partly allowed. Disallowance of claim of depreciation & business expenses - Held that:- We have heard the rival contention on this issue and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 45 lakhs (later on reduced to ₹ 30 lakhs). The Ld. CIT(A) has failed to appreciate that the conveyance deed for purchase of new residential house could not be completed within the period of two years from the transfer of the original asset for sufficient and bonafide reasons so that the time involved in legal proceedings should be excluded and in the substance of the matter, there was proper compliance. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have upheld the denial of exemption u/s.54F. 3.1 The Ld. CIT(A) has erred in law and on facts in confirming the disallowance of claim of depreciation of ₹ 1,21,639/- and business expenses of ₹ 67,067/-. 3.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 16th Sep, 2015 much later on the date of furnishing of return of income for assessment year 2013-14. Consequently, the assessing officer has stated that assessee has not fulfilled the conditions laid down therefore, she was not entitled for deduction u/s. 54F of the act. 4. The assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. The relevant part of the decision of the ld. CIT(A) is reproduced as under:- 7.2 1 have considered the assessment order and the submissions made by the appellant. A perusal of the same shows that the deed in respect of the purchase of property, on which exemption u/s. 54F has been claimed, is dated 16.09.2015. This is much beyond the statutory period wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (2014) 365 ITR 389. He has contended that ld. CIT(A) is not correct in disallowing the claim of deduction u/s. 54F without considering the bona fide reason for delay in completion of conveyance deed because of legal proceedings.. On the other hand, ld. departmental representative has supported the order of the ld. CIT(A). 6. We have heard both the sides and perused the material on record carefully. The assessing officer has not allowed the claim of deduction u/s. 54F of the act stating that the assessee should have purchased a new house on or after 9th Nov, 2011 on or before 8th Nov, 2014, however, the assessee has purchased residential house property on 16th Sep, 2015 which was beyond the two years prescribed limit u/s. 54F(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t part of the judgment of hon ble supreme court of India in the case of Sanjiv Lal vs. CIT 365 ITR 389 para 23 to 26 is reproduced as under:- 23. Consequences of execution of the agreement to sell are also very clear and they are to the effect that the appellants could not have sold the property to someone else. In practical life, there are events when a person, even after executing an agreement to sell an immovable property in favour of one person, tries to sell the property to another. In our opinion, such an act would not be in accordance with law because once an agreement to sell is executed in favour of one person, the said person gets a right to get the property transferred in his favour by filing a suit for specific performance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal clear that the decision in the case of Sanjeevlal was delivered after taking into account the peculiar facts of the case that the sale deed could not be executed because of the pending litigation and the competent court has prohibited the assessee to execute the sale deed therefore it is held that the assessee was entitled for relief inder section 54 of the act. In the case of the assessee also the property in question could not be purchased because of unavoidable circumstances as the first party seller of the property was expired before execution of the sale deed because of legal proceedings related to the clearance of tile of the property there was delay in execution of final sale deed as elaborated supra in this order. However, we co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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