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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: Shri Rajpal Yadav & Shri Amarjit Singh
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member ITA No. 158/Ahd/2016 Assessment Year 2012-13
Smt. Arunaben S. Patel, The ITO, 41, Pramukh Swami Vihar Ward-1(2)(3), Society, Nr. Akshar Vs Vadodara Chowk, Old Padra Road, (Respondent) Vadodara-390020 PAN: AVEPP1027D (Appellant)
Revenue by: Shri S.K. Dev, Sr. D.R. Assessee by: Shri Kamlesh Bhatt, A.R. Date of hearing : 11-06-2019 Date of pronouncement : 18-06-2019 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee’s appeal for A.Y. 2012-13, arises from order of the CIT(A)-5, Vadodara dated 30-10-2015, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
Both the grounds of appeal of the assessee are inter-connected to the issue of assessing capital gain in the year of the transfer of property and
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claim of exemption u/s. 54F of the act, therefore, for the sake of convenience both the grounds of appeal are adjudicated together.
The fact in brief is that asseseee has filed return of income declaring income at Rs. 9,74,220/- on 10th August, 2013. During the year under consideration, the assessee has sold a land for a consideration of Rs. 66,04,307/- being 1/3 shareholder in the land and claimed exemption u/s. 54F of the act for the amount of Rs. 54,12,898 as well as indexed cost of acquisition amounting to Rs. 3,43,108/-. The assessing officer has rejected the claim of deduction u/s. 54F of the act on the ground that the original asset was transferred on 17th Sep, 2011 therefore the assessee should have purchased a new house within a span of two years or should have constructed a new house within a period of three years from the date of such transfer. He was of the view that assessee should have constructed a new house by 30th Sep, 2014. Consequently, the assessing officer has disallowed the claim of deduction u/s. 54F of the act.
Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.
We have heard the rival contentions and perused the material on record. On perusal of the copies of agreement placed in the paper book, it is noticed that original asset was transferred on 19th Sep, 2011 to the developer M/s Narayanan Swaup Developers for a consideration of Rs. 601 per sq. ft. of construction permitted on the land. It is undisputed fact that as per return of income the assessee has herself offered the gain as long term gain in the
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assessment year 2012-13. Therefore, this plea of the assessee that capital gain in her case should have been assessed by the assessing officer in the year of its transfer has no substance as assessing officer has rightly assessed the capital gain in the year in which the agreement with the developer was executed. Therefore, first ground of appeal of the assessee is dismissed.
Regarding second ground of appeal for not allowing exemption u/s. 54F of the IT act on the ground that she had neither purchased a new asset within two years nor constructed a new asset within three years of the sale of the original asset, we have gone through the material on record and noticed that assessing officer in his finding at page no. 12 of the assessment order has held that assessee has booked a house and allotment of the same has been given. The assessing officer was of the view that the assessee should have purchased a new house instead of merely booking a new house. Regarding availability of deduction u/s 54F of the act on the basis of booking of a new house, we have perused the circular nos. 471 and 672 issued by CBDT. The relevant parts of these circulars are cited as under:- In CBDT Circular No. 471 dated 15-10-1986 as under:- “SECTION 54 OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - PROFIT ON SALE OF PROPERTY USED FOR RESIDENTIAL HOUSE -INVESTMENT IN A FLAT UNDER THE SELF- FINANCING SCHEME OF THE DELHI DEVELOPMENT AUTHORITY - WHETHER TO BE TREATED AS CONSTRUCTION FOR THEJPURPOSES OF CAPITAL GAINS” CBDT Circular no. 672 dated 16th Dec, 1993 has extended the benefit of Circular No. 471 to the other cases as under:- “SECTION 54 OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS-PROFIT ON SALE OF PROPERTY USED FOR RESIDENTIAL HOUSE - WHETHER ALLOTMENT OF FLATS/HOUSES 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”
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In this regard, we noticed that there was no document placed in the paper book to demonstrate that assessee has booked the house and allotment was given to her. In the light of the above cited circulars issued by the CBDT, we restore the issue of claim of exemption u/s. 54F of the Act on the basis of booking and allotment of new house to the file of assessing officer for deciding de-novo after examination/verification of the supporting materials to be produced by the assessee according to the terms/conditions laid down in the referred circulars issued by the CBDT. Therefore, the appeal of the assessee is allowed for statistical purpose.
In the result, the appeal for the assessee is partly allowed for statistical purpose. Order pronounced in the open court on 18-06-2019 Sd/- Sd/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 18/06/2019 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद