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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ NEW DELHI
Before: SHRI G.D.AGRAWAL, HON’BLE & SHRI SUDHANSHU SRIVASTAVA
PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER :
This appeal is preferred by the assessee against the order dated 25.10.2016 passed by the Ld. Commissioner of Income Tax (A)-XV, New Delhi for assessment year 2013-14.
The brief facts of the case are that the assessee had filed his return of income declaring total income of Rs. 9,93,000/-. The total income included capital gains arising on transfer of a residential house and claiming exemption u/s 54 of the Income Tax Act, 1961 (hereinafter called ‘the Act’) by way of investment
(Sandeep Taneja) in two residential houses. The assessee had sold his residential property situated at Gurgaon for Rs. 1,59,50,000/- which was having indexed cost of Rs. 12,73,614/- and the resultant long term capital gain was calculated at Rs. 1,46,76,389/-. The assessee made investment in purchase of one property at Dwarka, Delhi for Rs. 95,46,100/- and for another property in Gurgaon for Rs. 72,22,748/-. However, the Assessing Officer allowed benefit of exemption u/s 54 of the Act only in respect of the residential house situated at Dwarka and disallowed the claim in respect of the second flat situated at Gurgaon on the ground that exemption u/s 54 was to be allowed with respect to one residential unit only. Aggrieved, the assessee approached the Ld. CIT (A) who also upheld the action of the Assessing Officer.
Now the assessee is in appeal before the ITAT and has challenged the denial of exemption with respect to the 2nd residential unit.
The Ld. Authorised Representative submitted that the investment was made in both the properties before the filing of return of income on which the exemption has been claimed. It was further submitted that no exemption has been claimed on amounts which were paid after filing of return of income. It was also submitted that the assessee had complied with all the (Sandeep Taneja) requirements for claiming benefit of exemption u/s 54 of the Income Tax Act, 1961 and, therefore, the benefit of exemption should be allowed to the assessee.
In response, the Ld. Departmental Representative placed extensive reliance on the findings of both the lower authorities.
We have heard the rival submissions and have perused the relevant material on record. It is seen that the assessee’s case is squarely covered by decision of ITAT Delhi Bench in the case of Laxman Singh Rawat vs. ACIT in for Assessment Year 2008-09 wherein, vide order dated 22.08.2014, the Co-ordinate Bench had allowed the assessee’s claim of benefit u/s 54 of the Act with respect to purchase of two residential properties, one at Solan and the other at Baddi. The ITAT Delhi Bench, placing reliance on order of ITAT Mumbai Bench in the case of Meher R. Surti vs. ITO reported in [2013] 40 taxmann.com 138 (Mumbai-Trib.), had held that the benefit of exemption could not be restricted to one house only. This order of ITAT Delhi Bench was also upheld by the Hon’ble Delhi High Court in ITA no. 272/2015 vide Order dated 7th August, 2015. It is not in dispute that the allotment was made to the assessee in respect to the second residential house also. It is also not in 3
(Sandeep Taneja) dispute that the assessee had made investment of amount more than the entire capital gains as contemplated u/s 54 of the Income Tax Act, 1961. Although the Ld. CIT (A) has observed that the entire purchase consideration for the second residential property was not paid by the assessee before the filing of return of income, we are of the considered opinion that the assessee will be entitled to claim of benefit to the extent he had made payments towards the same within one year from the sale of property and the assessee has claimed only that amount which has been paid within one year from the sale of property. This fact is also evidenced from the order of Ld. CIT (A). Accordingly, in view of the facts of the case and the judgment of the Hon’ble Delhi High Court in case of Laxman Singh Rawat (supra), we hold that the assessee will be entitled to the benefit of exemption claimed u/s 54 of the Act in respect of the second residential property also. We set aside the order of the Ld. CIT (A) and direct the AO to recompute the taxable capital gains after taking into account the investment made in the second residential property also as per law after providing adequate opportunity to the assessee to present his case.
(Sandeep Taneja) 6. In the final result appeal of the assessee is stands allowed for statistical purposes.
Order pronounced in the open court on 11th October, 2018.