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Income Tax Appellate Tribunal, ‘C’ (SMC
Before: SHRI GEORGE MATHAN]
आदेश / O R D E R
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)- Puducherry, in appeal No.584/CIT(A)-PDY/2013-2014, dated 05.04.2016 for the assessment year 2008-2009.
Shri. A.S. Sriraman represented on behalf of the assessee and Shri. V. Nandakumar represented on behalf of the Revenue.
ITA No. 1397/Mds/2016 :- 2 -:
It was submitted by the ld. Authorised Representative that 3. the only issue in the appeal is against the action of the ld.
Commissioner of Income Tax (Appeals) in sustaining the rejection of the claim of deduction u/s. 54F of the Income Tax Act, 1961 (in short ‘’the Act’’) in the computation of long term capital gains. It was submitted that the assessee is an individual and had sold two pieces of lands at Velli Thirumutham Village, Srirangam Taluk for a consideration of �20,54,645/- on 22.11.2007. After deducting the indexed cost of the land, long term capital gains was determined at �17,68,425/-. Assessee had purchased a flat on the second floor, J.C.
Abode at a consideration of �17,27,657/-. Assessee had made a initial payment for the purchase of the said flat on 10.04.2006 and the final payment was made on 22.11.2007 for an amount of �27,379/-.
Assessee had obtained undivided interest in the land registered in the name of the assessee in respect of the flat purchased on 14.06.2006 and the balance payment have been made in respect of the construction of the flat on various dates as been extracted in the chart in the order of the ld. Commissioner of Income Tax (Appeals) at page 5 at para 7.2. As per the agreement between assessee and the promoter, the construction of the flat was to be completed within 30.06.2007. The completion certificate of the builder showed that the construction of the property was completed on 03.03.2008. It was ITA No. 1397/Mds/2016 :- 3 -: submitted that on the ground that the flat had been purchased by the assessee more than one year before the sale of the plots of the land on which capital gains were leviable. Ld. Assessing Officer denied the assessee benefit of exemption u/s. 54F of the Act. On appeal ld. Commissioner of Income Tax (Appeals) rejected assessee’s claim on the ground that no additional or supporting evidence had been produced other than the completion certificate of the builder, that the construction of the property was completed on 03.3.2008. It was submitted that as the last payment for the purchase/construction of the flat was within one year provided before the sale of the capital asset which gave rise to the levy of capital gains, assessee was entitled for the claim of deduction u/s. 54F of the Act.
In reply, the ld. Departmental Representative vehemently 4. supported the orders of the ld. Assessing Officer and the ld.
Commissioner of Income Tax (Appeals).
I have considered the rival submissions. As per the provisions of Sec. 54F of the Act, if the assessee has within a period of one year before or two years after the date on which the transfer took place purchased or within a period of three years after that date constructed, one residential house, then assessee is entitled for benefit of deduction u/s. 54F of the Act. Admittedly, the date of sale of capital asset is 22.11.2007. Thus, as per the provisions of Sec. 54F(1) of the ITA No. 1397/Mds/2016 :- 4 -:
Act, if the assessee has within the period from 22.11.2006 and 22.11.2009 purchased or has constructed a residential house before 22.11.2010, he would be entitled for benefit of deduction u/s. 54F of the Act. The last payment made by the assessee to the builder of the flat admittedly is 22.11.2007 which was the same date on which the assessee transferred the capital asset. This fact of the payment to the builder on 22.11.2007 stands undisputed. The completion certificate by the builder is also dated 03.03.2008. This had not been disputed or disproved. Thus clearly the payments to the builder are within the period stipulated u/s. 54F(1) of the Act. This being so, I am of the view that assessee is entitled to deduction u/s. 54F of the Act as claimed. In the circumstances, orders of the lower authorities stands reversed and ld. Assessing Officer is directed to grant assessee the benefit of deduction u/s. 54F of the Act as claimed.
In the result, appeal of the assessee stands allowed. 6. Order pronounced in the open court at the time of hearing on Thursday, the 18th of May , 2017, at Chennai.