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TMI Blog2018 (10) TMI 1861X X X X Extracts X X X X X X X X Extracts X X X X ..... estment of sale proceed in new residential house within two year after the date of transfer of old asset (old house) - HELD THAT:- The Hon ble Karnataka High Court in CIT vs. Jyothi K. Mehta Jyothi [ 2011 (1) TMI 551 - KARNATAKA HIGH COURT ] held that in newly asset acquired after the sale of original asset can also be a building or lands appurtenant thereto, which also should be a residential house . Therefore, the letter 'a' in the context it was used should not be construed as meaning singular . But being an indefinite article, the said expression should be read in consonance with the other words 'buildings' and 'lands' and, therefore, the singular 'a residential house' also permits use of plural by virtue of section 13(2) of the General Clauses Act. Therefore, merely because the assessee purchased two units, it could not be said that she was not entitled to the benefit of section 54. Assessing Officer is directed to allow exemption to the assessee under section 54 - Appeal of the assessee is allowed. - Shri G.S. Pannu, Vice-President And Shri Pawan Singh Judicial Member Appellant by : Shri Aarati Visanji with Sh. Salin R. Divatia-(AR) Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the residential flat from Oberoi Construction Pvt. Ltd. for ₹ 87,84,050/-. The assessee also paid stamp duty of ₹ 4,21,980/- which was claimed as a part of cost of acquisition. The assessee also claimed exemption under section 54 on investment of sale consideration on purchase of two flats within two year from the date of sale of old flat. The claim of the assessee was not accepted by Assessing Officer on taking view that entire payment was not paid by the assessee, the purchase agreement was registered on 19.07.2009 and the assessee has sold the flat on 05.10.2011. Moreover, the assessee has not received the possession of property on 25.04.2008. Therefore, the claim of assessee for acquisition of property on 25.04.2008 i.e. on which the assessee purchased it from previous owner was not accepted. The Assessing Officer treated the entire gain as Short Term Capital Gain and brought it to tax accordingly. The claim of exemption was also not allowed as the entire gain was treated as short term capital gain and further the capital gain arisen was invested in two flats. On appeal before the ld. CIT(A), the action of Assessing Officer was confirmed. Therefore, further ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9th July 2009 and the same was registered only on 03.08.2009. The assessee sold the said flat on 05.11.2011. Therefore, the assessee claimed that her holding period of the property should be counted from 25.04.2008 when she got an offer of allotment. As the assessee finally sold the property on 05.11.2011.The assessee claims that her holding period was over 36 month and she should get the benefit of LTCG as well as indexed cost of consideration from 2008 itself. The ld. AR for the assessee also relied on the CBDT circular No. 672 dated 16th December 1993 and the decisions of Madhu Kaul v. CIT [2014] 363 ITR 54 (P H), Vinod Kumar Jain v. CIT[2012] 344 ITR 501 (P H), Anita D Kanjani v. ACIT 23(1), Mumbai (ITA No. 2291/Mum/2015), Sneha Bimal Parekh v Pr. CIT, Mumbai (ITA No. 5489/Mum/2015), ACIT v. Sanjay Kumath (ITA No. 448/Ind/2017) , Simi Khanna v. ACIT (ITA No. 2076/Mum/2017) Nitin Prakash v. DCIT, Thane. 9. On the other hand the ld. DR for the revenue supported the order of the authorities below. The ld DR for the revenue submits that the assessee has not filed the copy of the allotment letter on record to show that the assessee has enforceable right against the builder. 10. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the investment is made within a period of one year before or after the date on which the transfer took place and in case of construction of a house, the benefit is available if the investment is made within three years from the date of the transfer. 2. The Board had occasion to examine as to whether the acquisition of a flat by an allottee under the Self-Financing Scheme (SFS) of the D.D.A. amounts to purchase or is construction by the D.D.A. on behalf of the allottee. Under the SFS of the D.D.A., the allotment letter is issued on payment of the first instalment of the cost of construction. The allotment is final unless it is cancelled or the allottee withdraws from the scheme. The allotment is cancelled only under exceptional circumstances. The allottee gets title to the property on the issuance of the allotment letter and the payment of instalments is only a follow-up action and taking the delivery of possession is only a formality. If there is a failure on the part of the D.D.A. to deliver the possession of the flat after completing the construction, the remedy for the allottee is to file a suit for recovery of possession. 3. The Board have been advised that under the above c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-1986 and possession of flat was delivered on a later date and thereafter she sold flat on 5-7-1989, capital gain arising from sale of flat was a long-term capital gain. 15. Further, the Hon ble Punjab Haryana High Court in Vinod Kumar Jain vs. CIT (supra) on the facts that assessee was allotted a flat by Delhi Development Authority (DDA) on 27.02.1982 on instalments under residential scheme. However, the possession of flat was given to the assessee on 15.05.1986. The allotment letter issued indicates the flat number and the balance amount payable. The assessee sold the flat on 06.01.1989 and claimed Long Term Capital Gain and further claimed the set off of capital on purchase of another flat. The Assessing Officer disallowed the claim of assessee that possession of flat was given only on 15.05.1986 and, therefore, the capital gain on sale of flat were Short Term Capital Gain. On appeal before the ld. CIT(A), the action of Assessing Officer was upheld. Tribunal also dismissed the appeal of the assessee. On further appeal before the Hon ble Delhi High Court, the assessee was allowed Long Term Capital Gain. While allowing appeal of the assessee, the Hon ble Court referred the CBDT C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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