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TMI Blog2025 (1) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no such documents were available to show that the assessee as well as his brother are the owners. We do not accept the reasoning given by the AO for arriving the share of the assessee at 50%. Assessee was also not able to explain why he has adopted a lesser area of land while computing the long term capital gains. If the assessee s contention that his share is 25% and therefore long term capital gains should be computed on his share alone, some more enquiry is to be conducted by the authorities. One such enquiry may be carried out with the sister of the assessee as well as his father and if they are able to show that they have sold their respective shares to various buyers, the dispute arose in this appeal would be solved. We therefore restore this matter to the file of the AO to call for the details from the assessee as well as his father and sister to prove that they sold their respective shares separately in favour of the buyers which they got based on the partition deed. Whether entire money received by him were utilised in the construction of the building and therefore he is eligible for deduction u/s. 54? - The assessee is entitled to claim deduction u/s. 54 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be allowed." 2. The brief facts of the case are that the assessee along with the other co-owners had entered into a Joint Development Agreement (JDA) on 11/03/2021 with the builder M/s. Balaji Constructions and handed over the land to the extent of 1,35,461 sq.ft. for the development and construction of flats. As per the JDA, the share of the owners are 39% and the share of the builder is 61%. As per the JDA, the builder should hand over approximately 56 flats to the owners as their respective share for surrendering their rights in the said land. The AO reopened the assessment for the reason that the assessee had entered into the JDA but not filed any return of income declaring any long term capital gains for the A.Y. 2011-12. 3. Thereafter, the assessee filed his return of income and computed the long term capital gain based on the value of the land given to the builder at the rate of Rs. 800/- per sq.ft. But while taking the area of the land, the assessee had taken a lesser area of 74,628 Sq.ft. instead of 82,631 Sq.ft. In the computation, the assessee had arrived the sale consideration as Rs. 5,97,02,408/- which was not accepted by the AO. The AO took the area of land as 82 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the official proceedings for converting the land for residential purposes were in the name of the brothers. The Khatha also stood in the name of the assessee as well as his brother. 5. The Ld.CIT(A) relied on the said details available in the JDA as well as in the proceedings made by the authorities and come to the conclusion that the assessee and his brother are the owners and therefore both have equal shares i.e. at 50:50 and on that basis, held that the computation made by the AO is in order. The ld CIT also relied on the valuation report submitted by the Valuation Officer u/s 55A of the Act since the assessee had accepted the valuation fixed by the Valuation officer at the initial stage. In respect of the other contention that the assessee is entitled for exemption u/s. 54 of the Act, the Ld.CIT(A) had not accepted the same for the reason that the construction of the new asset was well beyond the period of three years stipulated in Section 54. As against the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal. 6. At the time of hearing, the Ld.AR filed two paper books containing pages 1 to 118 and enclosed the various documents and contended that the comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of both sides and perused the materials available on record. 9. The Ld.AR made a submission that they are not pressing ground nos. 1 to 3 and therefore we are not adjudicating the said grounds and dismiss the same as not pressed. 10. Now we adjudicate the other grounds raised in this appeal. In this appeal there are two issues involved. The first issue to be decided is what is the share of the assessee in order to compute the LTCG. The second issue is whether the assessee is entitled for deduction u/s 54 of the Act on the ground that the entire sale consideration received are invested in the construction of the new property. 11. We have perused the JDA dated 11/03/2011 in which the assessee, his father, his sister and his brother in the capacity of owners had executed the said JDA and therefore the owners are 4 persons. Subsequent partition deed executed between themselves on 18/03/2016 also evidenced that the four persons are the owners of the land and they executed a partition deed between themselves for dividing the property which was constructed by the developer and handed over to them according to their shares. The said partition deed was also duly registered. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the share of the owners free of cost in lieu of the land given by the owners. We have also perused the unregistered settlement deed and we found that it is an additional document filed by the assessee to show that the property handed over to the builder was jointly owned by the four persons. We are in agreement with the argument that the title of the property cannot be decided on the basis of Khatha as held by the various Courts, when the assessee was able to establish the ownership of the lands by way of JDA and Partition Deed. The mere reliance on the Khatha issued by the authorities is not legally correct. The AO has also not produced any documents to show that the assessee and his brother are the owners except the Khatha. The ownership of the immovable property could not be transferred without executing any registered document. In the present case on hand there is no such documents were available to show that the assessee as well as his brother are the owners. In such circumstances we do not accept the reasoning given by the AO for arriving the share of the assessee at 50%. Further the assessee was also not able to explain why he has adopted a lesser area of land while computin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arent from facts that non-completion of the construction of the flat by the builder within the stipulated period was beyond the control of the assessee. In view of the decision of the Jurisdictional High Court in the case of CIT v. Smt. B.S. Shanthakumari [2015] 60 taxmann.com 74/233 Taxman 347 (Kar.) and CIT v. Sambandam Udaykumar [2012] 19 taxmann.com 17/206 Taxman 150/345 1TR 389 (Kar.) the assessee cannot be denied exemption under section 54 to the extent of investment in the new property, even though the construction of the new asset is not completed within the eligible period of 3 years from the date of sale/transfer of the original asset." 16. The Hon'ble Jurisdictional High Court has affirmed the above order of the Coordinate Bench of this Tribunal and held as follows in ITA No. 217 of 2018 dated 05.12.2018 in the case of PCIT vs. Shri Dilip Ranjrekar "3. In the instant case, the investment is made in a new property. The construction was not completed within a period of three years as narrated in Section 54 of the Act. The delay was not because of the assessee, but beyond his control, since the construction was put up by the builder. He has invested the amount of Rs. 2,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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