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TMI Blog2024 (7) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below have fallen in error in not considering the agreement to sell as an investment in a house for the purpose of section 54F when whole of the amount stood paid and possession delivered. Thus we consider it an appropriate case to set aside the findings on issue of computation of capital gains to the files of AO with directions to take into consideration the aforesaid conclusions of this Bench and complete the re-computation of the capital gains afresh. An opportunity of hearing be given to the assessee for the same. - Shri G.S. Pannu, Hon ble Vice President And Shri Anubhav Sharma, Judicial Member For the Assessee : Ms. Kirti Bindal, CA For the Revenue : Shri Anshul, Sr. DR ORDER PER ANUBHAV SHARMA, JM: The assessee is in appeal against the impugned order dated 31.08.2018 u/s. 250(6) of the Income Tax Act, 1961 (hereinafter referred as the Act ) passed by C CIT(A)-20, New Delhi or (hereinafter referred as the Ld. First Appellate Authority) in Appeal against an assessment order dated 28.12.2016 passed by Income Tax Officer, Ward-61(2) New Delhi (hereinafter referred as the Assessing Officer or in short AO) passed u/s. 147/143(3) of the Act, for the Assessment Year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of Rs. 5,00,000/- each has already been received on 14.06.2008 and 26.06.2008. At that point of time the circle rate for sale was Rs. 20,000/- per sq. mt. and the value of the sale consideration was Rs. 90,00,000/- as mentioned by the appellant and the AO has wrongly taken circle rate of Rs. 29,000/- which was w.e.f. 01.09.2008. Hence, the enhanced value u/s 50C should not have been taken by the AO. The appellant has also relied upon the amendment brought into the Act with effect from 01.04.2017 by the Finance Act, 2016, where the date of 'Agreement to Sale' was to be taken for the purpose of sale consideration for circle rate and not the date of registration. 6. The findings of the AO and the submission of the appellant were considered by CIT(A) and the claim of the appellant that the circle rate of the property should not have been taken by the AO u/s 50C as on 01.09.2008 as the 'Agreement to Sale' was made in the month of August and part payment has already been received in June, has been rejected by CIT(A) and it was held that the amendment u/s 50C of the Act was brought into the statute by the Finance Act 2016 w.e.f. 01.04.2017 where a proviso was inserted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Assessing Officer during the assessment, the same should have been taken note of. While ld. DR has relied the findings of ld. Tax authorities below. 8. We have taken into consideration the material before us and the submissions. In regard to ground no. 4, it comes up that in the sale deed, which is not disputed, there is mention of a sum of Rs. 5 lakhs being paid by cheque on 14.06.2008 and 26.06.2008. The copy of agreement made available at page 11-25 of the paper book shows that at the time of execution of agreement on 14.08.2008, these two transactions of payments made on 14.06.2008 and 26.06.2008 were recorded and it was agreed that out of total sale consideration of Rs. 90 lakhs adjusting the Rs. 10 lakhs paid by aforesaid cheques, the balance of Rs. 80 lakhs shall be paid at the time execution of sale deed on or before 10.09.2008. Admittedly, the circle rate on date of agreement was Rs. 20,000 per sq. mtr. and accordingly, it seems the valuation was done at Rs. 90 lakhs. 9. We are of the considered view that First Proviso to Section 50C as inserted by Finance Act 2016 w.e.f 01.04.2017, certainly applies to the present facts and circumstances as the agreement was exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 139(1) and was not required to deposit the same in Capital Gain A/c was not required to get the property registered or take possession before the due date of filing of return for the year under consideration, so as to claim deduction u/s 54F. 12. The assessee had invested in another property an amount of Rs. 75,00,000/-. The payment was made by bank which can be very well verified from the attached bank statement (page no. 3 g of the paper book. It is submitted that the deduction u/s 54F should allowed with respect to the property in Gagan Vihar purchased before filing of return for Rs. 75,00,000. It is submitted that the deduction under section 54F cannot be disallowed merely on the basis of the fact that the registered deed as not produced. 13. After taking into consideration the facts and circumstances and the impugned orders, we observe that the AO had specifically mentioned in para 8 of the assessment order that the assessee had claimed to have purchased one residential house worth Rs. 75 lacs and had contracted for construction of flat for Rs. 54,40,770/- and that the assessee himself had asserted that the assessee can claim deduction u/s 54F of the Act on any one of them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he account of Sunil. 16. Thus, we are of the considered view that the ld. tax authorities below have fallen in error in not considering the agreement to sell as an investment in a house for the purpose of section 54F when whole of the amount stood paid and possession delivered. In this context, we rely the following propositions of law as submitted by the ld. AR:- (i). ITO Ward 32(4) vs. Smt. Swati Oberoi ITA No.4150/Del./2018, Assessment Year : 2015-16 Delhi ITAT, where the Bench has held as follows; 13. In view of what has been discussed above, we are of the considered view that benefit of deduction u/s 54F of the Act cannot be denied to the assessee merely on the ground that conveyance deed has not yet been got registered particularly when the assessee is proved to be in possession of the property in question out of which she was already owner in possession of l/3rd share since 2008 after making a complete payment of the \ sale consideration to the vendors and has duly proved her possession over the property by way of electricity and water charges bills. So, we find no reason to interfere into the impugned order passed by the Id. C1T (A) allowing deduction to the assessee u/s 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble Apex Court does not make difference because as per this subsequent judgment of Hon ble Apex Court rendered in the case of CIT Vs. Balbir Singh Maini (supra), the assessee has not become the owner of the property in question because there is no registered sale deed executed by the vendor but as per the judgment of Hon ble Delhi High Court, becoming the owner of the property in question is not required for the purpose of section 54 of the IT Act. Section 54F of the IT Act is parametria with section 54 of the IT Act. Hence, we respectfully follow this judgment of Hon'ble Delhi High Court and decide the issue in favour of the assessee. 8. In the result, the appeal filed by the assessee is allowed. 17. Thus we consider it an appropriate case to set aside the findings on issue of computation of capital gains to the files of A with directions to take into consideration the aforesaid conclusions of this Bench and complete the re-computation of the capital gains afresh. An opportunity of hearing be given to the assessee for the same. 18. Consequently the appeal be considered allowed for statistical purposes. Order pronounced in the open court on 23.07.2024. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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