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TMI Blog2024 (10) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... right pursuant to the agreement dated 31.05.2016 by the assessee for a period of more than 7 years. No email or correspondence has been brought to our notice demonstrating that serious efforts were made by the assessee to ensure due completion of the construction within the time granted by the statute. Assessee should be careful and vigilant in enforcing his right which are missing, in the present case. As we do not find any reason to interfere in the findings given by the AO/DRP and accordingly both the appeals of the assessee are dismissed. - SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI MANJUNATHA, G. ACCOUNTANT MEMBER For the Assessee: CA Akshay Surana For the Revenue: Shri Jeeval Lal Lavidiya, CIT(DR) ORDER Per Laliet Kumar, J.M These two appeals filed by the respective assessee are directed against the common order dated 09.01.2024 of the learned ACIT (International Taxation)-1, Hyderabad relating to A.Y. 2017-18. Since common issues are involved in both these appeals, for the sake of convenience, these were heard together and are being disposed of by this common order. 2. The common grounds raised by the assessees in ITA No.231 and 232/Hyd/2024 reads as under: 1 1) The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered vide DAGPA document No.6418/2016 dated 31-05-2016, for a total sale consideration of Rs.43,61,20,000/- as against SRO value of Rs.62,86,20,000/-. As per the DAGPA the owners and developer shares are 47.25% and 52.75%. As the assessee is one amongst the 46 owners the share of the assessee is 1/46th of the share of the owners. The assessee s share in chargeable sale consideration as per section 50C of the IT Act, 1961 for computation of Long Term Capital Gain is Rs.64,57,000/- and the assessee will get the benefit of deduction of indexed cost of acquisition and construction/improvement when the details become available. 4. During the FY 2016-17 relevant to AY 2017-18, income chargeable to tax in the hands of assessee accrued in the form of Long Term Capital Gains to the extent of Rs.64,57,000/- but the assessee did not file return of income and he did not offer this income to tax. Therefore, income of Rs.64,57,000/- has escaped assessment in the hands of assessee for AY 2017-18. Hence, the Assessing Officer reopened the assessment with the prior administrative approval and a notice U/s 148 of the Income Tax act, 1961 was issued to the assessee. Notices u/s 142(1) of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and tried to draw parallels with schemes like DDA, indicating that completion or occupation isn't mandatory for claiming exemption u/s. S4F. The Panel has perused both the circulars. The first Circular No. 471 of 1986 is with respect to DDA only and not applicable to the case of the assessee. The second Circular No. 672 of 1993 is also on a different footing than the case of the assessee. For the sake of convenience, the circular is being reproduced here as under: 429. Whether allotment of flats/house by co-operative societies and other institutions, whose schemes of allotment and construction are similar to those of DDA, should be treated as cases of construction for purposes of sections 54 and 54F 1. Attention is invited to Board's Circular No. 471, dated 15-10-1986. It was clarified therein that cases of allotment of flats under the Self-Financing Scheme of the Delhi Development Authority (DIDA) should be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act. The Board has since received presentations that even in respect of allotment of flats/houses by co-operative societies and other institutions, whose schemes of allotment an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemes of DDA or of any co-operative societies or of any other institutions. 2.2.3.4 In view of the above, the claim of the assessee for construction of house in terms of Section 54F of the Act is misplaced and accordingly, the Assessee is not eligible for the exemption u/s 54F. Thus, this ground of the Assessee is hereby rejected. 7. It was the contention of the learned AR that pursuant to the direction of the DRP, the Assessing Officer disallowed exemption u/s 54F of the Act and the reasonings are given in para No.9 at page 6 of the assessment order which to the following effect: 9. Vide the above reply, the assessee 15 claiming exemption u/s 54F of Income Tax Act 1961. However, the explanation of assessee is not acceptable for the following reasons:- A) However, it is noticed that the assessee is yet to receive the Villa/residential house and has not acquired legal title on such residential house/villa as on the date of JDA. Further, the assessee has not got legal title/registered the residential house/villa in his name till date while the section 54F stipulates that the assessee shall purchase house within two years or construct new house within three years. So, it is a violatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction was only completed in Nov. 2023 and no registration has taken place in the name of the assessee. It was submitted that since the construction was not completed within a period of 3 years as contemplated u/s 54F of the I.T. Act, 1961, the benefit of section 54 cannot be granted to the assessee. 11. We have heard both the parties and perused the material available on record. The important dates which are relevant for adjudication of the appeal are: i) JDA was entered into by the assessee and others on 31.5.2016 ii) The plans were approved on 17.04.2017 iii) Construction was to be completed within 36 months i.e. by 31.05.2019. iv) Construction was completed on Nov. 2023 v) The litigation filed by the Partners of the Developers against each other as clear from the order was 21.10.2021. 12. From the reading of the above said relevant dates, it is abundantly clear that the dispute among the partners of the developers arose only after 25.10.2021 which is beyond the period of 3 years from the date of transfer of the capital assets which happens pursuant to the JDA on 31.5.2016. Admittedly, there is a delay of more than 7 years in completing the construction as against the per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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