Tribunal orders Assessing Officer to grant deduction under Section 54F, allowing appeal.

The Tribunal directed the Assessing Officer to grant the deduction under Section 54F, thereby allowing the appellant's grounds. The appeal was thus allowed in favor of the appellant.

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Issues Involved:
1. Assessment of Long Term Capital Gains on transfer of leasehold rights.
2. Rejection of relief under Section 54F of the Income Tax Act, 1961.

Issue-Wise Detailed Analysis:

1. Assessment of Long Term Capital Gains on Transfer of Leasehold Rights:
The appellant initially raised a ground challenging the assessment of Long Term Capital Gains of Rs. 1,09,91,914 on the transfer of leasehold rights in a plot of land. However, during the proceedings, the appellant's representative stated that this ground would not be pressed. Consequently, this ground was dismissed.

2. Rejection of Relief under Section 54F of the Income Tax Act, 1961:
The appellant's primary contention was the denial of relief under Section 54F, which pertains to the exemption of capital gains tax when the proceeds are invested in a residential property. The key points of contention and findings were as follows:

a. Investment in Multiple Flats:
The appellant had invested the sale proceeds in four adjacent flats on the same floor, claiming them as a single residential unit. The Revenue argued that the deduction could only be claimed for one flat. The Tribunal noted that prior to the amendment in AY 2015-16, the term "a residential house" could include multiple units if they formed a single residential house. Thus, the appellant's claim was valid.

b. Joint Ownership with Son:
The flats were purchased in joint names with the appellant's son. The appellant argued that the entire investment came from her funds, and her son's name was included to avoid legal complications due to her age. Citing precedents, the Tribunal held that the investment's source was crucial, not the title's name. Therefore, the joint ownership did not invalidate the claim.

c. Timing of the Purchase:
The appellant sold the original asset on 20.04.2010 and booked the new flats on 12.07.2011, with payments completed by 12.09.2012. The Revenue contended that the purchase agreement dated 19.03.2013 was beyond the two-year limit. The Tribunal, referencing the CBDT Circular No.471 and judicial precedents, held that the date of allotment (12.07.2011) was the acquisition date, making the investment timely.

d. Non-deposit in Capital Gain Account Scheme:
The appellant did not deposit the unutilized capital gains in a Capital Gain Account Scheme but invested the funds before filing the return under Section 139(4). The Tribunal, relying on judicial interpretations, concluded that the extended deadline under Section 139(4) applied, and since the investment was made before this deadline, the claim was valid.

e. Purchase from a Family Firm:
The flats were bought from a firm where the appellant's sons were partners. The Revenue suggested this was a decorative transaction to evade tax. The Tribunal found no evidence of sham transactions and noted that the law did not prohibit purchasing property from related parties.

Conclusion:
The Tribunal directed the Assessing Officer to grant the deduction under Section 54F, thereby allowing the appellant's grounds. The appeal was thus allowed in favor of the appellant.

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