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PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by Revenue under Section 253 of Income-tax Act is directed against the order of ld. CIT(A)-33, Mumbai dated 06.05.2016 for Assessment Year 2012-13. The Revenue has raised the following grounds of appeal:
l. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was erred in deleting the addition of Rs.1,24,40,806/- and allowing the deduction u/s.54 of the Income Tax Act, 1961." 2. "Whether the Ld. CIT(A) was correct in allowing the deduction u/s.54 as construction was not completed within the three years time as contemplated by the Income Tax Act, 1961." 3. "The appellant prays that the order of Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored."
At the outset of hearing, the ld. Authorized Representative (AR) of the assessee submits that the grounds of appeal raised by Revenue is covered in favour of assessee and against the Revenue by the order of Tribunal in Mum 2016-Shri Anup Saxena assessee’s wife case in ITA No. 5102/Mum/2016 for AY 20112-12. The ld. AR of the assessee further submits that the facts of the assessee’s case are similar as the facts of assessee’s wife case. The assessee and his wife is co-owner of 50% of the residential property/ flat No. 1702 at Avarsekar Heights, Worli, on the sale of which, the assessee and his wife claimed Long Term Capital. The appeal of the assessee’s wife was decided first.
On the other hand, the ld. Departmental Representative (DR) for the Revenue after going through the decision of Tribunal in assessee’s wife case in dated 14.08.2018 conceded that the grounds of appeal are covered in favour of assessee.
We have considered the submission of both the parties and have gone through the orders of authorities below. The co-ordinate bench of Tribunal in assessee’s wife case (Smt. Mridula Anoop Saxena) on similar facts passed the following order:
“7. We have heard the rival submissions and also perused the material on record. The ld. CIT(A) has partly allowed the appeal of the assessee holding as under: “16. In the light of the discussion made in the preceding paragraphs, in my considered opinion, the benefit of sec. 54 of the I. T. Act is available to the appellant considering the fact that the entire payment for the new property was made by the appellant as well as the allotment letter was issued before the limitation period of 3 years.
It is observed that the appellant has claimed that the cost of acquisition of the new flat was Rs. 2,35,58,440/- and the appellant's 50% share comes to Rs. 1,17,79,220/-. It is contended by the AR of the appellant during appellate proceedings that the appellant has offered short application of funds i.e. amount of capital gain less amount invested i.e. .Rs. 6,61,586/- (Rs. 1,24,40,806- Rs. 1,17,79,220) as taxable LTCG in A. Y.2015-16 i.e. year in which figure of application of fund is crystallized. However, I do not agree to Mum 2016-Shri Anup Saxena
this proposition of the appellant. The provisions of sec. 54(1)(i) state as under:-
54.(1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu Undivided family], the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, one residential house in India], then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say- (i) If the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset)], the different between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil, or
From the above provisions of sub section (i) of sec. 54(1), it is clear that if the amount of Capital Gain is greater than the cost of the new asset, the difference shall be charged as income of the previous year in which the transfer took place. In the instant case, the capital gain was excess by an amount of Rs. 6,61,586/- which is required to be charged to tax in the year of transfer i.e. A. Y. 2012-13 and not A. Y. 2015-16 as contended by the AR in the written submission. Hence the AO is directed to tax Rs. 6,61,586/- as LTCG as against Rs. 1,24,40,806/- being computed in the assessment order. The AO is also directed to make the re-computation of LTCG after making necessary verification of proof of payments of various charges and taxes related to the purchase of new asset viz., VAT of Rs. 2,68,560/-. Service Tax of Rs. 6,39,630/- and "as per clause 11” of Rs. 5,75,350/ -, as claimed during appellate proceedings. With the above remarks, grounds of appeal no. 2 is partly allowed.”
8. We notice that the findings of the Ld. CIT (A) are based on the decisions of the various Benches of the ITAT and the decision of the Hon'ble Delhi High Court and the Hon'ble High Court of Punjab and Haryana. The Hon'ble Delhi High Court has held in the case of CIT vs. Ramakrishnan, 48 taxmann.com 55(Den has held that the date of allotment is relevant for the purpose of computing holding period and not the date of conveyance deed. Similarly, the Hon'ble P&H High Court has held in Vinod Kumar Jain vs. CIT, 344 ITR 501 (P&H) that an allottee acquires a title of property on receiving allotment letter and payment of installment is only a consequential action upon which delivery of possession follows. Hence, in the light of the undisputed facts that the assessee had made payment of Rs. 1,25,00,000/- on 18.04.2011 from her share Mum 2016-Shri Anup Saxena
in the long term capital gain of Rs. 3,50,00,000/- and the allotment letter was issued on 20.01.2012 and finally executed and registered on 09.03.2015 and in the light of the ratio laid down by the Hon'ble High Courts discussed above, we are of the considered view that the findings of the Ld. CIT(A) are in accordance with the law and the evidence on record. Hence, we do not find any infirmity in the order of the Ld.CIT (A) to interfere with. Accordingly, we uphold the findings of the Ld. CIT (A) and dismiss the sole ground of appeal of the revenue and direct the AO to compute the deduction in terms of the order of the Ld. CIT(A). In the result, appeal filed by the revenue for assessment year 2012-2013 is dismissed.”
Considering the decision of Tribunal in assessee’s group/wife’s case, we do not find any merit in the grounds of appeal raised by Revenue.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 30/08/2018.