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TMI Blog2022 (10) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... would construe part performance by the assessee. However, without possession he would not be entitled for claiming transfer in terms of Section 2(47) - There is no quarrel so far the mandate of law that in terms of Section 54, the assessee is required to appropriate the capital gain towards the purchase of new asset made within year. It is the purchase which should be made within one year and in the absence of possession there would not be any transfer of capital asset, hence no purchase of new asset in terms of Section 54 of the Act. Undisputedly, the AO gave part relief by treating last instalment paid by the assessee as the capital gain appropriated within one year. In our view this act is not as per the intent of the provision. The possession of new asset was given by the builder within one year of sale of original asset. The date of handing over of possession would be date of purchase, since right over the property passed on the day of handing over of possession. Respectfully following in the case of CIT Vs. Smt Bina K. Jain [ 1993 (11) TMI 7 - BOMBAY HIGH COURT] , we hold that the assessee is entitled for deduction u/s 54 of the Act. We, therefore, direct the AO to gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals), who after considering the submissions dismissed the appeal. Now the assessee is in appeal before this Tribunal. 3. Ground no. 3 is general in nature and needs no adjudication. 4. Apropos ground nos. 1 2 of the appeal, learned counsel for the assessee submitted that the authorities below have failed to appreciate the facts in right perspective and declined the whole claim of deduction u/s 54 of the Act on the ground that the new asset was not acquired within the prescribed time. He contended that the authorities below have erroneously observed that there was no investment in the new asset one year before the original asset was transferred. However, the case of the assessee is that the assessee entered into Buyer s agreement with the builder on 26.05.2010. He drew our attention to paper book pages 27 to 62 and also took us through the Buyer s agreement and particularly drew our attention to clause 14 wherein the procedure for taking possession is described. As per this clause, the Builder, upon obtaining certificate for occupation and use from the competent authority, shall offer in writing possession of the said apartment to the Allottee. In terms of this clause p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or has within a period of three years after that date /constructed, one residential house in India], then], instead of the capital gain being charged to incometax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) If the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. 7. The undisputed facts in this case are that the assessee sold the original asset on 9.7.2017 for a sale consideration of Rs. 1,44,00,000/- and computed the long term capital gains on this transaction at Rs. 1,19,02,758/-. The assessee claimed deduction u/s 54 at Rs. 1,19,02,758/-. However, the AO restricted the deduction to the extent of Rs. 8,42,028/-. The contention of the assessee is that the lower authorities have erroneously taken the date of purchasing new asset as the date when the assessee had paid the last instalment i.e. 27.03.2012. It is contended that the possession of the new asset was taken on 18.06.2012 and original asset was sold on 9.7.2012. Therefore, the requirement of law for purchasing new asset within one year before the date on which the sale transaction of original asset took place is met. Now the moot question is as to what is the date of purchasing of new asset. In the present case following dates are relevant for consideration: 1) 26.05.2010 Apartment buyer agreement was executed. 2) 15.03.2011 to 27.03.2012 Payment of instalments are made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arises from the transfer of any long-term capital asset, not being a residential house, and the assessee has, within a period of one year before or two years after the date on which the transfer took place, purchased a residential house, the capital gain shall be dealt with as provided in that section. As per the section certain exemption has to be allowed in respect of the capital gains to be calculated as set out therein. 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 the 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 July 29, 1988, when the petitioner paid the full consideration am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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