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Income Tax Appellate Tribunal, DELHI BENCH ‘D’ : NEW DELHI
Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI
PER KULDIP SINGH, JUDICIAL MEMBER :
Appellant, ACIT, Circle 54 (1), New Delhi (hereinafter referred to as the ‘Revenue’) by filing the present appeal sought to set aside the impugned order dated 05.05.2015 passed by the Commissioner of Income - tax (Appeals)-18, New Delhi qua the assessment year 2012-13 on the grounds inter alia that :-
“ 1. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.3,21,83,504/- on account of long term capital gain made by the AO by not appreciating the fact that there is no provision under the Income Tax Act to reduce the returned income of the assessee otherwise than by filing a revised return of income filed in time allowed by the provisions or the IT Act.
2. On the facts and circumstances of the case, the CIT(A) has erred in not appreciating the fact that the assessee is not eligible to claim deduction u/s 54F as the assessee is having more than one residential house on the date of purchase of the new asset.
3. On the facts and circumstances of the case, the CIT(A) has erred in not appreciating the fact that the assessee has invested in the said property on which he is claiming deduction on 20.01.2010 i.e. 1 year and 7 months before the sale of the original asset which is beyond the limitation period.”
Briefly stated the facts necessary for adjudication of the issue at hand are : Assessing Officer (AO) made addition of Rs.3,21,83,504/- to the returned income of the assessee of the long term capital gain by declining the deduction claimed by the assessee under section 54 of the Income-tax Act, 1961 (for short ‘the Act’) on the ground that major payment has been made by the assessee to purchase the property on 12.08.2011 and also on the ground that the assessee is not entitled for deduction u/s 54F as the assessee is having more than one residential house.
Assessee carried the matter by way of an appeal before the ld. CIT (A) who has deleted the addition by allowing the appeal.
Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.
Assessee has not preferred to put in appearance despite issuance of the notice and consequently, we proceeded to decide the present appeal with the assistance of the ld. DR as well as on the basis of documents available on the file.
We have heard the ld. Departmental Representative for the revenue to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
Undisputedly, assessee has sold its property during the year under assessment situated at D – 107, Anand Niketan, New Delhi on 12.08.2011 purchased on 07.04.2000 and computed the long term capital gain accrued on such property as under :-
Particulars Amount (Rs.) Sale consideration 3,98,00,000/- Less : Indexed cost of acquisition 73,47,291/- Capital Gain 3,24,52,709/- Less : Deduction u/s 54 ( in the revised 3,24,52,709/- computation) in the original return it was claimed as 54F Balance Nil
It is also not in dispute that the assessee has filed revised computation and in the original computation, the word 54F was missing and claimed the same to be a clerical error. It is also not in dispute that the AO has rejected the revised computation filed by the assessee on the ground that the same was not filed on its own.
However, ld. CIT (A) by relying upon numerous judgments delivered by Hon’ble High Courts and coordinate Benches of the Tribunal and Hon’ble Supreme Court in case of Goetze (India) Ltd. vs. CIT 157 taxmann.com 1 (SC) allowed the claim of the assessee made u/s 54 of the Act. We are of the considered view that when claim of the assessee u/s 54 is otherwise admissible, the same cannot be denied on the sole ground that such claim was not made in the original return of income.
Now, the second question arises for determination in this case is, “whether the assessee is entitled for benefit of deduction u/s 54 of the Act on merits”. It is the case of the AO that after sale of property by the assessee, new property situated at C-76, Defence Colony, New Delhi vide sale deed dated 20.01.2010 was not purchased within one year before accruing the long term capital gain. However, it is the case of the assessee that he has entered into an agreement to sell to purchase the house on 19.11.2010 and the ownership was agreed to be transferred to the buyer latest by 17.01.2011 (within 60 days) but the sale deed was executed only on 12.08.2011 due to legal complication. It is also the case of the assessee that all the payments have been made on or before 20.01.2010 i.e. within a period of one year from the date of accrual of long term capital gain.
Ld. CIT (A), after examining all the legal complications brought on record by the assessee in not executing the sale deed in her favour within time, reached the conclusion that the property situated at C-76, Defence Colony, New Delhi was purchased by the assessee in November 2010 when vacant possession of the property was also taken by the assessee as per agreement dated 05.09.2010. When it is proved on record that the sale deed dated 12.08.2011 has been executed in terms of the Agreement o Sell dated 19.11.2010 and when major portion of the sale consideration was paid and possession of the property was taken over by the assessee, the sale of the property would certainly relate back to the date of agreement to sell dated 05.09.2010 which is well within the period stipulated for getting the benefit u/s 54 of the Act. So, finding no illegality or perversity in the impugned order passed by the ld. CIT (A), present appeal filed by the Revenue is hereby dismissed. Order pronounced in open court on this 3rd day of September, 2019.