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TMI Blog2021 (9) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... dicate payment of consideration by cheque. Further, both agreement to sale and registered sale deeds are entered into on 06.02.2012. Under these facts and circumstances, denying the benefit of deduction u/s.54F for excess consideration paid over and above consideration shown in registered sale deed is not correct because, merely for the property was registered for a lesser consideration, the genuine transaction between the parties cannot be doubted when it comes to allowing benefit under exemption / deduction provisions. AO as well as the ld.CIT(A) has erred in sustaining addition towards disallowance of exemption claimed u/s.54F towards consideration paid for purchase of property. Restriction of cost of improvement - HELD THAT:- AO has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing additions: I. Claim of Exemption u/s 54 of the Income Tax Act Claim u/s 54 restricted to ₹ 28,00,000 instead of ₹ 58,00,000/- II. Restriction of Cost of Improvement Cost of Improvement restricted to ₹ 3,50,000 instead of ₹ 3,00,000/- 2. Claim of Exemption u/s 54 of the Income Tax Act 1) The Honorable CIT (A)-9 has erred in overlooking the Provisions of Sec 54 of the Income tax Act where the word used is that the "cost of the residential house So Purchased" and nowhere the section talks about the sale consideration in sale deed or sale agreement. 2) The appellant places reliance on Delhi High court Decision in the case of Balraj v. CIT [20021 723 Taxman 290 (Delhi), which was pronounced duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Honorable C.I.T (A)-9 erred deciding the consideration as ₹ 28,00,000/- as admitted by the seller in his return by overlooking the consideration received amounting to ₹ 58,00,000/- admitted by the seller in response to the notice u/s133(6) issued by the ACIT and also as per agreement. 10) The Appellant prays to consider the value of consideration as ₹ 58, 00,000/- and not as ₹ 29,00,000/- by considering the grounds placed before the Honorable ITAT and render justice. 3. Restriction of Cost of Improvement u/s 55 1) The Honorable CIT(A) and the Income tax authorities(ACIT) Failed to appreciate the Normal Practice of providing 80 to 85% of the total value of the project cost as loan by the Financial Institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - towards purchase of new residential house from Shri G. Murugesan vide sale agreement and sale deed dated 06.02.2012. The AO has re-computed long term capital gain by restricting cost of improvement to ₹ 3,00,000/- as against ₹ 3,50,000/- claimed by the assessee, on the ground that the assessee has proved source for cost of improvement to the extent of ₹ 3,00,000/- only, by way of loan taken from M/s. Canara Bank. The AO had also allowed exemption u/s.54F of the Act, to the tune of ₹ 28 lakhs as against ₹ 58 lakhs claimed by the assessee, on the ground that though the assessee has paid a sum of ₹ 58 lakhs to Shri G. Murugesan for purchase of property but, property has been registered for a consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the property was registered for lesser amount as per requirement of stamp and registration Act, total consideration paid for purchase of property cannot be ignored, more particularly when both parties agreed that sale consideration for property was at ₹ 58 lakhs. 5. The ld.DR on the other hand strongly supporting order of the ld.CIT(A) submitted that although the assessee has paid consideration in cheque but, the purpose of payment of excess amount is not discharged because the consideration as per registered sale deed was at ₹ 28 lakhs. Therefore, in absence of any documentary evidence to substantiate the claim of payment of consideration for purchase of property, deductions cannot be allowed for entire consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s disallowance of exemption claimed u/s.54F of the Act, to the tune of ₹ 30 lakhs towards consideration paid for purchase of property. Hence, we direct the AO to delete addition made towards disallowance u/s.54F of the Act. 7. The next issue that came up for our consideration from Ground No.3 of assessee appeal is restriction of cost of improvement to the tune of ₹ 3 lakhs as against cost of improvement claimed by the assessee for ₹ 3,50,000/-. 8. The assessee has claimed cost of improvement to the property for ₹ 3,50,000/- and the source for cost of improvement has been explained, out of own capital of ₹ 50,000/- and bank finance from Canara Bank of ₹ 3 lakhs. The AO has restricted cost of improvement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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