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TMI Blog2023 (1) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... with M/s IREO Victory Valley Pvt. Ltd. on 05/07/2011 to purchase house in Gurgaon. The agreement clearly highlights that as on the date of the agreement, the builder was in a possession of the land and construction was to be made in phases in future. The assessee made payments for the said property starting from Financial Year 2011-12 to 2014-15. Therefore, the decision of the A.O. to treat the investment in property at Gurgaon as an instance of purchase in June, 2010 is a debatable issue which cannot be decided u/s 154 of the Act. Therefore, the Ld. A.O. has committed an error in invoking Section 154. As admittedly the last payment for the apartment has been made on 21/05/2014 and the possession has been handed over upon receipt of occ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter claiming exemption u/s 54 of the Act of Rs. 1,02,78,673/-. The capital gain arising to the assessee in the original return were claimed to be reinvested by the assessee in a residential project of M/s IREO Victory Valley Pvt. Ltd. in Gurgaon. The assessment for the Assessment Year 2014-15 was completed by accepting the income of the assessee at Rs. 1,96,640/- which has been declared by the assessee in the return of income and by allowing the exemption claimed by the assessee u/s 54 of the Act with respect to capital gain. 4. Further vide rectification order u/s 154 R/W Section 143 (3) of the Act dated 29/06/2018, the Ld. A.O. has disallowed the claim of deduction u/s 54/54F of the Act on the following grounds. 1. Exemption clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act on 04.05.2018. The AO took note of the fact that the exemption of Rs. 1,02,78,673/- u/s 54 of the Act was claimed and allowed in this case. The facts of the case are that the assessee had sold a residential plot at Bangalore on 18.09.2013 for a sum of Rs. 1,17,75,000/- where the capital gain was computed at an amount of Rs. 45,26,682/- Further, on 14.03.2014, the assessee sold a flat in Dwarka for a sum of Rs. 80 Lakh where the capital gain was to the tune of Rs. 57,51,810/-. The assessee had booked a property in Gurgaon for a sum of Rs. 1,16,66,537/- on 05.07.2010 and claimed exemption u/s 54 of the Act against investment in this property. 5.4 The AO observed during the rectification proceedings that the deduction u/s 54/54F o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IREO VICTORY VALLEY PVT LTD vide agreement dated 05.07.2011 attached on page (16-44 of Ann 'A'). An examination of the same would reveal that the Builder was yet to construct the flat. The same is evident from clauses B,C,D,E,F,G,H,I,J,K (Page 18-19 Ann 'A'), Para lclause l,J,K,L,N (Page 21 Ann 'A'), completion certificate requirement (Page 22 Ann 'A'), Floor plan definition (Page 22 Ann 'A') and payment plan on (Page 44 Ann 'A'). The LD AO treats the above agreement dated 05.07.2011 as purchase of a completed flat and not to be purchase of flat under construction. b) In the following cases it has been held that the purchase of a flat to be constructed on account of Builders Buyers agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O to treat the investment in property at Gurgaon as an instance of purchase in June 2010 is a debatable issue and therefore, the AO is wrong in deciding this issue by invoking the provisions of Section 154 of the Act. 5.7. Further, it is relevant to note that in this case, the last payment for apartment has been made on 21.05.2014 and possession has been handed over upon receipt of occupation certificate (refer Clause 13.1 of the agreement) vide letter bearing memo No. ZP-358/SD(BS)/2016/14990 dated 25.07.2016 ZP358/Vol.l/SD(BS)/2017/24532 dated 28.09.2017. Accordingly, the possession has been handed over within 3 years of the date of transfer of the property. Thus, the present case does satisfy the condition of construction within 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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