SRI. SANJAY MAHESH SHA,BENGALURU vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 12(3), BANGALORE

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ITA 2066/BANG/2019Status: DisposedITAT Bangalore31 August 2021AY 2011-121 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to establish the completion of the residential property as per the requirements for capital gains exemption. The evidence presented was insufficient to counter the BBMP's official records and the AO's findings.

What were the facts?

The assessee claimed exemption for capital gains under Section 54F by investing in a residential property. The Assessing Officer (AO) sought proof of completion, but the assessee provided an architect's certificate. The BBMP stated the building was still under construction and no completion certificate was issued.

What were the issues?

Whether the assessee provided sufficient evidence of the completion of the residential property to claim exemption under Section 54F. Whether the architect's certificate was a valid substitute for an official completion certificate.

Which sections of the Income-tax Act were involved?

Section 54F

AI-generated summary — verify with the full judgment below

property at 246/83, survey no.83, Ammani Belandur Khave village, Varthur Hobli, Bangalore East taluk vide registered deed dated 15/06/2011 and the investment in the land was Rs.6,64,54,770/- till the date of filing of the return. ft was further stated that the construction of the building on the above site had been completed in April 2013. After several opportunities granted by the AO to substantiate his claim for exemption of capital gains u/s 54F, the AR for the assessee submitted a duplicate certificate of completion dated 10/04/2013 from the architect, Ms. Kajal Gupta, stating that the building had been completed as per the sanction plan approved by the Assistant Director of Town Planning, BBMP, Mahadevapura Zone. The AR was asked to furnish the completion certificate issued by the authorities but there was no compliance.

3.

Thereafter, the AO issued notice u/s 133(6) of the Act to the BBMP, requesting for details of construction of the residential house of the appellant. The AO also deputed her Inspector for a site visit, who was accompanied by an official of the BBMP. The Inspector, in his report, submitted that the construction of the house was still in progress and that the house was not fit for residential purpose. The AO received replies dated 14/03/2014 and 20/03/2014 from the Joint Commissioner, BBMP Mahadevapura in which it was stated that the building was still under construction and no completion certificate had been issued by them. Subsequently summons were issued by the AO to both the assessee and the architect and their statements were recorded on oath. The assessee claimed that a one-bedroom house was constructed initially and then due to some reason, it was demolished and new construction started from October 2013. The same version of events was corroborated by the architect in her statement. However, the AO noted that the architect, having recently started her consultancy firm, would not have contradicted the assessee for risk of losing a big client. From the details submitted, the AO

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