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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM
This appeal is filed by the assessee for A.Y. 2014-15 against the appellate order passed by the National Faceless Appellate Centre [The learned CIT (A)] dated 13/03/2022 wherein assessee preferred an appeal against Assessment order passed by the Income Tax Officer 28(1) (3) Mumbai [the ld AO] under Section 143(3) of the Income Tax Act [The Act] dated 20/12/2016 was dismissed. The assessee has preferred appeals on following grounds :
“Being aggrieved by the order of the Assessing Officer, your appellant submits herewith the following grounds of appeal (which are taken up without prejudice to each other) for your sympathetic consideration:
On the facts and circumstances of the case and in law, the learned Assessing Officer has erred in denying deduction u/s 54 to the Appellant by treating the Long Term Capital Gain arising on sale of old property as Short Term Capital Gain without properly appreciating the documents and submissions made by the Appellant during the assessment proceedings.
On the facts and circumstances of the case and in law, the learned Assessing Officer has erred in carrying out addition of ₹31,14,00/- as The Appellant craves leave to (i) add any new ground of appeal and/or (ii) amend, alter or delete any of the above grounds of appeal.”
The brief facts of the case shows, that assessee is an individual engaged in the business of Fruit Merchants and Commission Agents. He filed return on 29/11/2014 declaring total income of ₹ 4,99,990/-. Return was picked up for scrutiny.
The Assessing Officer noted that during the year assessee has made sale and purchase transaction with respect to the property. He sold a property being flat no. 203 at Laxmi Apartment 04/01/2014 for ₹45,00,000/- stamp duty value of the same was ₹51,91,500/-. The property was acquired by assessee on 23/12/2011 for ₹20,77,200/- . Assessee further purchased a property at flat no E11, Sai Mahal on 20/02/2014 for ₹ 53,30,000/-. While computing the capital gain, assessee has shown long term capital gain of ₹ 9,21,907/- and claimed deduction under Section 54 of the Act. The assessee was examined to justify an applicability of the Section 56 of the Act for the sale of old property and further the claim of the assessee of deduction under section 54 of the Act. 4. Assessee submitted that computation of long term capital gain has been erroneously made and correct tax liability may be determined by applying provisions of Section 50C and deduction under Section 54 may be granted. 5. The Assessing Officer found that the property sold by the assessee is a short term capital gain for the reason that purchase agreement was executed on 23/12/2011, project commencement certificate issued by the municipal Corp. On 12/12/2011. The allotment letter submitted shows that assessee was allotted the property on 2/7/2009, same is the date of purchase of the property taken by the assessee. On that date asset was not at all in existence. Therefore, the property sold by the assessee is not held for 36 months and therefore the gain arising therefrom was a short term capital gain. Hence, the gain is also not entitled for deduction u/s 54 of the act. Further according to the LD AO on 23/11/2011 only Agreement to sale was executed. Assessing Officer examined the relevant documents and found that purchase of property was not in existence on 23/12/2011. The assessee further stated that the builder has given an allotment letter dated 20/07/2009. The learned Order pronounced in the open court on 19/12/2022