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TMI Blog2022 (10) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession of the flat and, therefore, this capital gain be set off against price of the flat, which ultimately came to his possession. CIT(Appeals) failed to take cognizance of the judgments referred by him in paragraph 5 (extracted supra). The assessee has utilized the capital gain arose within one year from taking possession of the new flat and, therefore, on the basis of the Circulars and the judgments referred by CIT(Appeals), is entitled for the deduction. Accordingly, we allow the claim of the assessee and direct AO to grant deduction under section 54 and 54F - Accordingly, the appeal of the assessee is allowed exparte. - I.T.A. No. 1209/KOL/2019 - - - Dated:- 12-10-2022 - Shri Rajpal Yadav, Vice-President (KZ) And Shri G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne has come present on behalf of the assessee. Therefore, we proceed ex-parte against the assessee. 4. The assessee has claimed exemption under section 54 and 54F of the Income Tax Act. Such exemption has been denied to the assessee by observing that it has booked the flat with the builder in earlier year but ultimately took the possession in subsequent years. Therefore, he failed to fulfil the conditions of section 54 and 54F. We take note of the finding recorded by the ld. CIT(Appeals), which reads as under:- 5. Findings of CIT (A)- In the instant case the appellant has earned the Long Term Capital Gain of Rs. 10,16,649/- on sale of flat at Dhanbad and Long Term Capital Gain of Rs.37,28,015/- on sale of shares of Shree Ram Electro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be treated as deemed owner and accordingly it should be treated as date of purchase. The Ld. A/R has accordingly argued that since Long Term Capital Gain arose within one year before the date of possession, hence the appellant is entitled to exemption u/s.54 and 54F On going through the records, I find that substantial payments against the said flat was already made before possession. It is relevant to refer to on CBDT s Circular No.471 dated 15.10.1986, further clarified by CBDT Circular No.672 dated 16.12.1993 that relevant extracts of which is reproduced hereunder: Board have been advised that under the above circumstances, the inference that can be drawn is that the D.D.A. takes up the construction work on behalf at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The moot question is whether the agreement with builder to purchase a flat that is going to be constructed, is the case of purchase or construction. In this regard, Hon ble Court of Mumbai, in the case of Hilla T.B. Vadia 216 ITR 376 held that it is a case of construction. Further, on identical question, i.e., whether the booking of flat with the builder is to be considered a case of ACIT vs. Sardar Kaur Sujan Singh and it was held to be a case of construction. In recerh/Jidtlgements in the case of CIT vs. Bindra Kumar (2001). 114 taxmann.com 266 Hon ble High Court of Delhi [jurisdiction High Court] has held that the purchase of property in multi storied building amounts to construction of building within the meaning of section 54(1) for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in some other cases. 6. Ground No.5 is consequential in nature and therefore no adjudication is required. 7. Ground No.6 is general in nature and therefore no adjudication is required. In the result appeal of the assessee is dismissed . 5. It is pertinent to observe that the case of the assessee is covered by Circular No. 471 and 672 of the CBDT, because the assessee has booked the flat, which has not been disputed by the Revenue. The dispute is that deduction ought to be claimed in the year when flat was booked and not in the year when possession was taken. On the other hand, the case of the assessee is that capital gain has been arose in the year in which he took the possession of the flat and, therefore, this capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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