TaxTMI 
TaxTMI 
2012 (6) TMI 408
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....nt of assessment year 2006-07. Thereafter, the assessee sold the house at Alwarpet on 13.11.2006. Assessee, thereafter, again purchased another residential house at Spur Tank Road, Chetpet on 15.11.2006 for Rs. 70,80,620/-. The Assessing Officer opined that the long term capital gains of Rs. 73,94,157/- which was allowed as exemption in the assessment year 2006-07 is to be withdrawn in the assessment of the assessment year 2007-08. Further, according to the Assessing Officer, assessee suffered capital loss of Rs. 25 lakhs on the sale of house property situated at Alwarpet and therefore, allowing set off of such loss, he brought to tax the balance amount of Rs. 48,94,157/-. 4. On appeal, the ld. CIT(A) deleted the aforesaid addition of Rs. 48,94,157/- for the reasons mentioned as under: "After careful consideration of the facts of the case, material available on record, written and oral submissions made by the appellant, the issue involved in this appeal is discussed and decided in the ensuing paragraphs. Facts of the case are that the appellant sold her landed property at Velachery in May 2005 for a consideration of Rs. 81.00 lakhs and consequently purchased a property at Alwarp....
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....dispute that requires to be settled is whether the sale of the Alwarpet property was a sale made by the appellant or not and that if at all it is held that the sale of the Alwarpet property does not involve the appellant, then whether the Alwarpet property transacted at Rs. 75,00,000/- was sold for Rs. 50,00,000/-. During the course of the appellate proceedings, it was contended by the authorised representative of the appellant that the sale of the Alwarpet property was by way of conveyance of the irrevocable Power of Attorney transferred to the new owner by way of another power of attorney and that the same was mainly for the purpose of reducing the burden of paying stamp duty often and again. The authorised representative further contended that the Assessing Officer had viewed the sale of the Alwarpet property, held by the appellant by way of an irrevocable POA to the new owner, as sale by the appellant and that the appellant had not held the sale proceeds of the Velachery property as investments in the appropriate Long-term' Capital Gains Scheme was not acceptable to him for the reason that the grant of exemption from Capital Gains Tax is available in a case only when a proper....
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....he light of the above discussion, material available on record and the submissions made by the authorized representative of the appellant, the scenario that emerges is that the sale proceeds of the Velachery land was blocked a advance in regard to purchase of another property and due to which it was not possible of the appellant to have the proceeds from the sale of Velachery invested in any capital gains scheme. Further, the sale of Velachery property was in May 2005 and that though the appellant advanced Rs. 75.00 lakhs with a view to purchase a flat at Alwarpet, Chennai, the same did not get through owing to the reasons that the Alwarpet property had certain inherent disadvantages and drawbacks in the opinion of the appellant which led to the belief and trust in the mind of the appellant that holding the Alwarpet property would not give any positive effects due to the 'Vaastu defects' which are quite personal in nature and are naturally acceptable. Buying a property for self-occupation does not take place in a minute or hour. It requires lot of thinking and ultimate satisfaction of the buyer that the property to be purchased would deliver the benefits that are always anticipate....
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....on, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1) shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred." 6. Thus, from a reading of the above provisions, in our considered opinion, the Assessing Officer was justified in treating Rs. 73,94,157/- as long term capital gains of the year under consideration as because the assessee in its Return of Income for Assessment Year 2006-07 claimed exemption with reference to investment made in the house property at Alwarpet. However, we find that the assessee has invested in purchase of new residential house at Rs. 70,80,620/- within the period of two years in which the transfer took place and therefore, the assessee was eligible for deduction u/s 54F(1) of the Act in respect of the said investment out of this deemed long term capital gains. In our considered opinion, the Assessing Officer was not justified in not granting exemption u/s 54F with referen....