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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI S.S. GODARA & DR. DIPAK P. RIPOTE
PER S.S. GODARA, JM :
This assessee’s appeal for AY 2013-14 arises against the CIT(A), Pune-3’s order dated 27.08.2020, passed in case No. PN/CIT(A)-3/ITO Wd.2(2)/398/2015-16, involving proceedings under 143(3) of the Income Tax Act, 1961 in short the Act.
Heard both the parties. Case file perused. 2. Coming to the assessee’s sole substantive grievance that both the lower authorities have erred in law and on facts in rejecting section 54 deduction claim of Rs.77,48,507/- in the course of Assessing Officer’s assessment framed on 16.02.2016 as upheld in the CIT(A)’s order, we note that the lower appellate discussion reads as follows :- “5.3 DECISION :The observations of the AO, submissions of the appellant and the material on record have been considered. 5.4 The appellant filed return of income for A.Y. 2013-14 on 24/03/2014 declaring total income at Rs. 3,55,000/-. In this case, the appellant had purchased a flat in Sapodilla, Wadgaonsheri, jointly with her husband and father in law, in 2005 for a consideration of Rs. 42,99,625/-. The said property was gifted to the appellant by her husband and father in law vide gift deed dated 15/12/2011. The appellant sold the subject property vide agreement dated 27/02/2013 for a consideration of Rs.1,50,00,000/-. The appellant had already purchased another property i.e. flat in Lunkad Sky Vie, Viman Nagar vide agreement dated 14/12/2011 for Rs.1,45,59,000/. Thus the property at Viman Nagar was purchased 1 year 2 months and 6 days before the sale of property at Wadgaoseri. However, the appellant claimed deduction of Rs. 77,48,507/- u/s. 54 as per the statement of total income. 5.5 However, as per the provisions of the Sec 54 of the Act, it is clear that in order to be eligible for deduction u/s 54(1), the appellant should have purchased residential house within one year before or two year after the date of sale of Wadgaonseri property. In the instant case, the appellant sold the Wadgaonseri property (original Asset) on 27/02/2013 and bought the new asset (Viman Nagar) on 14/12/2011. The appellant would have been eligible for deduction u/s 54(1) if the new asset was purchased not before 27/02/2012. Further, Section 54 does not talk about payment but talks only about sale and purchase of the capital asset. In view of the above, an addition of Rs. 77,48,507/- was made to the returned of income of the appellant under the head “Capital Gain”. 5.6 It is also seen that the property at Wadgaoseri was sold on 27/02/2013 and thus the sale proceeds were not utilised for purchase of flat at Viman Nagar which was purchased vide agreement dated 14/12/2011. Further, the section 54 of the Act does not talk about payment or utilisation but talks only about date of sale and purchase of the capital asset. 5.7 The appellant has quoted 5 case laws but none of the case law says that utilsation is important and not date of sales. All the cases quoted by the appellant are not applicable to the facts of the appellant.
Therefore the addition of Rs 77,48,507/- made by the AO is confirmed.”
It is thus clear that the Revenue’s stand all along has been that the assessee is not eligible for the impugned deduction since she had purchased the house property in issue vide agreement dated 14.12.2011 which falls beyond the prescribed time of one year before her sale deed itself dated 27.02.2013. Mr. Jasnani has vehemently reiterated the CIT(A)’s foregoing clinching factual discussion to this effect.
We have given our thoughtful consideration to vehement rival stands and find no merit in the Revenue’s argument supporting the impugned section 54 deduction disallowance. A perusal of the assessee’s undisputed purchase agreement re-investment document dated 14.12.2011 (pages 11 to 69 in the paper book) makes it clear at page 22 that only 10% of the total purchase price had to be paid by the said date followed by a detailed payment schedule of 10% and 4% each on 11 various occasions, 5% on completion of brick work thereof and 4% each on four occasions and the remaining 5% at the time of occupation of the house property; respectively. There was a further stipulation in the agreement at page 14 therein that possession had to be given to the purchaser/assessee only after she had complied with the foregoing detailed payment schedule. 5. Ms. Vaidya invited our attention to page 87 in the paper book containing the assessee’s bank statement which prima-facie suggests that the specified payment schedule had very well travelled beyond clinching date of 26.02.2013 i.e. one year before the sale deed executed by her on 27.02.2013. We thus hold in light of all these clinching facts that the learned lower authorities have erred in law and on facts in disallowing the assessee’s section 54 deduction claim of Rs.77,48,507/-. The same stands deleted therefore. Ordered accordingly. 6. This assessee’s appeal is allowed in above terms. Order pronounced in the Open Court on 23rd November, 2022.