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TMI Blog2023 (7) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... handed over to the assessee along with his wife on 07/04/2016, which falls within a period of two years from the date of sale of the old flat, i.e. 11/02/2016, therefore assessee is entitled to claim deduction under section 54 in respect of capital gains from the sale of old flat. Decided in favour of assessee. - ITA No. 3017/Mum./2022 - - - Dated:- 6-6-2023 - SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER For the Assessee by : Shri Neelkanth Khandelwal For the Revenue by : Shri Pratap N. Sharma ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 24/05/2022, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [ learned CIT(A) ], for the assessment year 2016 17. 2. The present appeal is delayed by 159 days. In his affidavit seeking condonation of delay in filing the present appeal, the assessee has made the following submissions:- 1. That the order dated 24.05.2022 of the Commissioner of Income tax (Appeals) was available for do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal before the Tribunal. We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon ble Supreme Court in the case of Collector Land Acquisition, Anantnag Vs. MST Katiji and others: 1987 SCR (2) 387. It is well established that rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In view of the above and having perused the affidavit, we are of the considered view that there exists sufficient cause for not filing the present appeal within the limitation period and therefore, we condone the delay in filing the present appeal by the assessee and we proceed to decide the appeal on merits. 5. In this appeal, the assessee has raised the following grounds: 1. The Commissioner of Income-tax (Appeals) at National Faceless Appeal Centre (hereinafter referred to as the CIT(A)) erred in upholding the action of the Assistant Commissioner of Income-tax, Circle 2, Thane (hereinafter referred to as the Assessing Officer) in not allowing exemption of Rs 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act be not denied. In response thereto, the assessee submitted that he was given possession of the new flat after 31/12/2015 and therefore the claim made by him under section 54 of the Act is correct and thus be allowed. The Assessing Officer ( AO ) vide order dated 14/12/2018 passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that the assessee sold the old flat on 11/02/2016 and thus in order to claim deduction under section 54 of the Act the assessee should have purchased a new residential property within a period of one year before the transfer/sale and this period ends on 11/02/2015. However, the assessee purchased a new flat on 10/02/2014 when he made the payment of the first instalment of Rs. 10 lakh. Further, the agreement for sale of the new flat is dated 14/12/2014 and the same was registered on 19/01/2015, therefore, these two dates are not within the period of one year from the date of transfer/sale of the old flat on 11/02/2016. From the perusal of the Ledger Account, the AO held that in respect of the old flat, the assessee received Rs. 11 lakh on 20/01/2016 and Rs. 23,50,000 during the financial year 2016-17. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the new flat is not out of any sale consideration received from the old flat. 9. Before proceeding further, it is relevant to note the provisions of section 54 of the Act, which reads as under:- 54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, 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 income-tax 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, 10. Therefore, as per section 54 of the Act, if the assessee within a period of one year before or two ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of an assessee if any capital gain 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 of 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 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 petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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