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TMI Blog2022 (3) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... ssession of the flat. We are of the considered view that on the facts of the present case the date on which possession is by the Assessee (i.e. 02.04.2016) should be taken as the date of purchase. The requirement of the Section 54 is that the Assessee should purchase a residential house within the specified period and source of funds is quite irrelevant. Nowhere, it has been mentioned that the funds received as consideration from sale of original asset must be utilized for the purchase of the new residential house - See DR. PS. PASRICHA [ 2008 (1) TMI 649 - ITAT MUMBAI] Since the date of purchase falls within a period of 2 years from the sale of Original Asset (i.e. 21.05.2014), the Assessee is entitled to benefit under Section 54 of the Act. - Decided in favour of assessee. - ITA No. 1557/Mum/2020 - - - Dated:- 8-3-2022 - Pramod Kumar, (Vice President) And Kuldip Singh, Judicial Member Rajesh Athavle for the Appellant Neha Thakur for the Respondent ORDER Per Bench : - 1. By way of the present appeal the Appellant/ Assessee has challenged the order dated 20.01.2020 passed by the Commissioner of Income Tax (Appeals) under Section 250 of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs after the sale of the Existing Residential House. According to the Assessing Officer the New Residential House was purchased on 15.02.2012, i.e., the date on which the Agreement for Sale, dated 07.02.2012 was registered. Since this was 2 years and 3 months prior to the date of transfer/sale of the Original Asset (i.e. 21.05.2014), the Assessee could not be granted the benefit of Section 54 of the Act. The Assessing Officer was also of the view that the Assessee had utilized his regular income to repay the loan instalments and not the consideration received from the same of the property. 4. In the appeal filed by the Assessee against the assessment order, the CIT(A) moved on the premise that date of registration of Agreement for Sale (07.02.2012) is to be considered as date of purchase of New Residential House and decided the appeal against the Assessee holding that purchase of property was beyond the specified period of 2 years. The CIT(A) also rejected the alternative argument of the Assessee that since the property being purchases was under construction the benefit of Section 54 of the Act can be extended to the Assessee by treating the transaction as a case of constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oters and developers who have agreed to sell to the Assessee a flat in a multi-storey building. When the Agreement for Sale was registered the multi-storey building was not yet constructed and the obligation of the Assessee to make payment is linked to construction. The Agreement for Sale was required to be registered it was governed by the provisions of Maharashtra Ownership Flats Act, 1963 as per paragraph/clause 53 of the said agreement. The relevant extracts of paragraph/clause 53 of the Agreement for Sale and Section 4 of the Maharashtra Ownership Flats Act, 1963 are reproduced below: Agreement for Sale - Para/ Clause 53 53. This Agreement shall always be subject to the provisions contained in the Maharashtra Ownership Flats Act, 1963 and Maharashtra Ownership of Flat Rules 1964 and all provisions of laws applicable thereto subject to the mutually agreed and accepted contractual obligations which are mentioned herein. Maharashtra Ownership Flats Act, 1963 Section 4(1) Section 4(1) Notwithstanding anything contained in any other law, a promoter who intends to construct or constructs a block or building of flats, all or some of which are to be taken or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of Section 54F of the Act the Hon ble High Court held that for the purpose of determining the date of purchase of new residential house the relevant date in the date when the petitioner paid the full consideration amount on the flat becoming ready for occupation and obtained possession of the flat. The relevant portion of the aforesaid judgment reads as under: 2. Under section 54F in the case of an assessee ..........The department contends that the assessee did not purchase the residential house either one year prior to or two years after the sale of the capital asset which resulted in long-term capital gains. According to the department, the agreement for purchase of the new flat was entered into more than one year prior to the sale. Hence, the petitioner is not entitled to the benefit under section 54F. In our view the Tribunal has rightly negatived this contention and has held that the new residential house had been purchased by the assessee within two years after the sale of the capital asset which resulted in long-term capital gains. The Tribunal has held that the relevant date in this connection is 29-7-1988 when the petitioner paid the full consideration amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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