SHRI NAVINBHAI P. PATEL,VADODARA vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(2), BARODA

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ITA 24/AHD/2017Status: DisposedITAT Ahmedabad07 May 2019AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the matter to the CIT(A) for fresh adjudication. The CIT(A) is to examine the developer agreement, payments made, and evidence submitted by the assessee regarding the investment in the new property.

What were the facts?

The assessee sold ancestral land and declared capital gains, claiming exemption under Section 54F for investment in a new residential unit. The AO disallowed the exemption, stating the assessee failed to deposit capital gains before the due date and did not purchase/construct a new house within the stipulated time.

What were the issues?

Whether the capital gain is taxable in the year of transfer or developer agreement, and whether the assessee is eligible for exemption under Section 54F based on the investments made.

Which sections of the Income-tax Act were involved?

Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD

For Appellant: Shri Kamlesh N. Bhatt, AR

PER MAHAVIR PRASAD, JUDICIAL MEMBER

1.

This appeal filed by the Assessee is directed against the order of the Ld. CIT(A)-IV, Ahmedabad dated 21.09.2016 pertaining to A.Y. 2015-16 and following grounds have been taken:

ITA No. 24/Ahd/2017 2 . A.Y. 2012-13 1. In view of the facts and circumstances of the case, the Ld. CIT (A) ought to have directed the Ld. A. O. to assess the income of capital gain in the year of it's transfer and not in the year in which the developer agreement was executed and hence Your Petitioner prays that the Ld. A. O. be directed to tax the income in the year in which transfer took place. 2. In view of the facts and circumstances of the case, the Ld. CIT(A) ought to have allowed the exemption U/s. 54 F of The Income Tax Act, 1961 in respect of the investment made by the appellant in the purchase of new residential unit and hence Your Petitioner prays that the Ld. A. O. be directed to allow the exemption U/s. 54 F as claimed by the appellant.

2.

Facts of the case are that the assessee is an individual having income of remuneration and interest from the partnership firm in which he is partner and also having interest and other income. During the year under consideration, assessee has sold his ancestral land and declared the capital gain on it. And as per A.O. capital gain to the extent of Rs. 64,29,989/- arising on sale of the said immovable property was assessable in the hands of the assessee. In the return of income filed by the assessee on 09.03.2013, the assessee has declared Long Term Capital Gain of Rs. 8,61,660/- and assessee has claimed exemption u/s. 54F of the Act amounting to Rs. 50,80,583/-.

3.

In reply to the notice, assessee submitted that he has entered into an agreement for development of land and thereafter assessee has booked new house with P.S. Villa for Rs. 5,36,000/- and allotment letter dated 1st February, 2012 was issued by the developer. And further stated that assessee has already given an amount of Rs. 9,55,000/- up to 31st March, 2013 towards cost of construction to the developer and he has also paid Rs. 13,00,000/- and Rs. 5,50,000/- in the

ITA No. 24/Ahd/2017 3 . A.Y. 2012-13 Financial Year 2013-14 and in Financial Year 2014-15 and assessee claimed deduction under 54F.

4.

On the other hand, ld. A.O. contention was that assessee has not deposited amount of capital gain account before the due date and assessee has not purchased or constructed new house within two years from the transfer of original assets and disallowed the claim of the assessee and made addition of Rs. 52,13,133/-.

5.

Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) who dismissed the appeal of the assessee. 6. Now, assessee has come before us.

7.

We have gone through the relevant record and impugned order. In this case, assets in question is inherited one and was owned by previous owner from whom it was inherited owned it much prior to 01.04.1981. Assessee made an agreement with developer on 17.09.2011 as and when property is to be developed and to be sold at that point of time consideration of Rs. 601 per square feet to be paid to the assessee. Without the aforesaid payment, the developer will not be entitled to give possession of a flat to any buyers.

8.

In support of its contention, assessee has filed some working before us with regard to payment booked by the developer and payment received by the assessee. Thus, in the interest of justice, we set aside this matter back to file of the ld. CIT(A) who will go through all the working and evidences on which assessee seeks to rely upon and an opportunity of being heard to be given by

ITA No. 24/Ahd/2017 4 . A.Y. 2012-13 the ld. CIT(A) to the assessee and thereafter ld. CIT(A) will decide a matter afresh as per provision of law.

9.

In the result, appeal filed by the Assessee is allowed for statistical purposes.

Order pronounced in Open Court on 07- 05- 2019

Sd/- Sd/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 07/05/2019 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad

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