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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI C.N. PRASAD & SHRI N.K. PRADHAN
ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the assessee. The relevant assessment year is 2014-15. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-2, Thane [in short ‘CIT(A)’] and arises out of the assessment completed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).
The ground of appeal filed by the assessee reads as under :
The Ld. CIT(A) erred in upholding the addition of Rs.1,69,47,407/-, by denying the exemption claimed u/s 54 of the I.T. Act, 1961, not appreciating that the appellant had complied with the conditions of sec. 54 of the I.T. Act,
Sompalsingh J. Kataria 1961 and therefore was eligible for exemption as claimed in the return of income.
Briefly stated, the facts of the case are that the assessee filed his return of income for the assessment year (AY) 2014-15 on 09.08.2014 declaring total income of Rs.2,14,850/-. The assessee had sold his flat No. 2303, situated at North Side, Hiranandani Meadows, Thane for a total consideration of Rs.2,70,00,000/- on 29.05.2013 and after claiming indexed cost, the long term capital gains (LTCG) of Rs.1,69,47,407/- was determined. The assessee had claimed set off u/s 54 the above LTCG against purchase of another flat No. 2202, Plot A, Basilius, Hiranandani Estate, Ghodbunder Road, Thane from Roma Builders Pvt. Ltd. for a total consideration of Rs.2,62,25,000/- on 29.03.2012. The AO treated the sale date as 29.05.2013 instead of 23.03.2013 claimed by the assessee and accordingly held that the new flat was acquired 14 months before the sale of flat/residential property. Thus the AO rejected the claim of exemption of Rs.1,69,47,407/- of the LTCG made by the assessee u/s 54F of the Act, against the purchase of flat of Rs.2,62,25,000/- on 29.03.2012.
Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). During the course of appellate proceedings, the assessee stated before the Ld. CIT(A) that he had sold the flat on 23.03.2013 i.e. the date on which Memorandum of Understanding/Agreement to Sale dated 23.03.2013 was entered between the assessee and the buyer and not on 29.05.2013 as held by the AO. In support of the above claim, the assessee filed copy of agreement along with other details. From the said details, the Ld. CIT(A) observed the following facts :
Purchase of flat – Rs.2,62,25,000/- Sale of flat – Rs.2,70,00,000/- Date of allotment to Purchase of flat – Date of agreement to sale of flat – 23.3.13 – 19.5.11 (Amount paid Rs.2,00,000/-), - Amount received – Rs.5,00,000/- on 26.3.13, 28.3.12 – paid Rs.80,00,000/-, by cheques Rs.5,00,000/- on 28.3.13, by cheques.
Amount received on the date of agreement - Amount received on the date of agreement Date on which agreement to purchase regd. Date on which agreement to purchase regd. 29.3.12 29.5.13
From the above facts, the Ld. CIT(A) observed that the assessee had purchased a house by registering the purchase agreement on 29.03.2012 and paid Rs.82,00,000/- (31.27% out of total purchase value of Rs.2,62,25,000/- and the same was allotted on 19.05.2011. It is stated by him that as per the provisions of the section, seller cannot defer the liability of tax against LTCG in other year, on account of receiving the balance amount. The Ld. CIT(A) further observed that :
“5.2 On the other hand it is seen that the appellant claimed to have entered into an agreement to sale his flat on 23.3.2013 and had received the token amount of Rs.5,00,000/- on 26.3.13 and another Rs.5,00,000/- on 28.3.13 totaling to Rs.10,00,000/- in F.Y. 2012-13, as against the total sale consideration of Rs.2,70,00,000/-. Thus, the appellant had received 3.70% of the total consideration in A.Y. 2013-14 and balance 96.30% was received in the next financial year i.e. after May / June, 2013 and the sale deed was also registered. Had this case been of charging of tax against the Long term capital gain, then the charging of Long term capital gain of Rs.1,69,47,407/- would not have been justified in A.Y. 2013-14, as the major part of the sale proceed was received in the next year and sale agreement was also registered on 29.5.2013 and accordingly assessable in AY 14-15. It is pertinent to mention here that if the sale
Sompalsingh J. Kataria 23.3.13 then purchase date of new flat should be taken as 19.5.11, as the same was allotted to the appellant against token payment of money. In view of these facts the AO has rightly taken the actual date of sale, in this case, as 29.5.2013 as the major part of the sale consideration was received on or after this date i.e. the date on which sale to agreement was registered. Accordingly, the claim of the appellant that he had sold the flat on 23.3.2013 is factually as well as legally incorrect, hence, not tenable, therefore, rejected.”
Before us, the Ld. counsel for the assessee files a Paper Book comprising of (i) Details of sale of flat no. 2303, North Side, Hiranandani Meadows, Thane with bank statement duly highlighting the entries of sale consideration received, (ii) Details of purchase of flat no. 2202, Basilius, Hiranandani Meadows, Thane with bank statement duly highlighting the entries of payments to builder, (iii) Documents pertaining to purchase of flat no. 2202, Basilius, Hiranandani Meadows, Thane (a) Allotment letter dt. 28.03.2012 issued by M/s. Roma Builders Pvt. Ltd., (b) Receipts issued by M/s. Roma Builders Pvt. Ltd. for payment of consideration, (c) Possession letter dt. 20.03.2015, (d) Agreement dt. 29.03.2012 for purchase of flat, (iv) Documents pertaining to sale of flat no. 2303, North Side, Hiranandani Meadows, Thane (a) Agreement for sale of flat dt. 29.05.2013, (b) Memorandum of understanding dt. 23.03.2013, (v) Acknowledgement for filing ITR, computation of income, statement of long term capital gain and financial statements for A.Y. 2014-15, (vi) Letter dt.27.12.2016 submitted to AO during asst. proceedings, (vii) Agreement dt.29.05.2013 for sale of Amenities in flat no.2303, North Side, Hiranandani Meadows, Thane.
Sompalsingh J. Kataria It is clarified by him that the documents listed above excepting at Sr. No. (i) and (ii) were filed before the AO, whereas all the documents listed above were filed before the Ld. CIT(A).
It is the contention of the Ld. counsel that the assessee had claimed exemption u/s 54 of the Act and the same has not been adjudicated by the Ld. CIT(A). Also it is stated that the matter has not been examined by the AO with regard to the above claim of exemption made by the assessee. Thus it is stated that the matter may be restored either to the AO or CIT(A) for a fresh assessment.
On the other hand, the Ld. Departmental Representative (DR) submits that the above matter has been dealt at length by the Ld. CIT(A) and there is no need for restoring it to the lower authorities. Referring to the claim of exemption made by the assessee u/s 54 of the Act, the Ld. DR submits that the same may be adjudicated by the Tribunal.
We have heard the rival submissions and perused the relevant materials on record. The reasons for our decision are given below.
In the instant case, the assessee has declared LTCG on sale of flat No. 2303, North Side, Hiranandani Meadows, Thane as under : i. Sale of flat as per registered sale agreement Rs. 2,70,00,000/- dt. 29.05.2013 (Copies at pg nos. 73 to 92 of paper book) ii. Less : Cost of acquisition Agreement dt. 30.04.2010 Cost price Rs.76,11,480/- Indexed cost of acquisition Rs.1,00,52,292/- 7611480 x 939
Sompalsingh J. Kataria 711 iii. Gain Rs.1,69,47,708/- iv. Exemption u/s 54 Investment in new residential house property - flat no. 2202, Basilius, Hiranandani Rs. 2,74,27,920/- Meadows, Thane vide registered agreement dt. 29.03.2012 (Agreement copy, relevant documents at pg nos. 10 to 72 of paper book). v. Taxable long term capital gains NIL
A perusal of the above clearly indicates that the assessee had claimed exemption u/s 54 of the Act. In appeal against the order of the AO, the Ld. CIT(A) has dismissed the appeal on the ground that the assessee is not eligible to claim exemption u/s 54F of the Act.
In such a situation, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make a de novo order after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the AO.
In the result, the appeal filed by the assessee is allowed for statistical purposes.