TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 415
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....sessee an individual filed his return of income for the assessment year under consideration on 31/03/2010 declaring total income of Rs.10,45,299/-. The return was initially processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny assessment. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had sold certain property on 29/10/2007 to one Smt. Vakkalanka Padmasree. After deducting the cost of acquisition at Rs. 19,75,886/-, the assessee had computed the capital gains at Rs. 58,90,114/- and had claimed exemption u/s 54F of the Act. On being asked by the Assessing Officer to furnish the details of investment made for claiming exemption u/s 54F, the assessee had submitted that he had made payment of Rs. 64 lakhs to one M/s Dhatri Constructions in March 2008. He further submitted that M/s Dhatri Constructions had transferred that amount to one M/s Fima Properties Ltd., Hyderbad and the said M/s Fima Properties had concluded agreement of sale on 18/01/10, vide a registered document, in respect of property admeasuring 2528 sq.ft. at Flat No. 1203, on 3rd floor of Fima Hilltop in sy.No. 129/77, situated at shaikpet Village ....
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.... with written submissions, the AR of the assessee also submitted Xerox copy of an agreement of sale stated to be executed on 19/03/2008 between Dhatri Constructions and the assessee, Xerox copy of construction agreement stated to be executed on 19/03/2008 between the assessee and that company and Xerox copy of sale deed dated 18/01/10 executed between several persons represented by M/s Fima Properties Pvt. Ltd., as their development agreement cum General Power of Attorney holder, and the assessee, shown as purchaser, for purchase of undivided share of land 92.7 sq.yds., flat No. 1203 on 3rd floor in residential building known as 'Fima Hilltop, Block "B", Tower No. 12, for a lumpsum consideration of Rs. 40 lakhs. 7. After considering the submissions of the assessee, the CIT(A) observed that the assessee had not clarified the factual position with reference to various observations made by the Assessing Officer in the assessment order and only made reference had been made to certain agreements. He further observed that the Assessee had not explained as to how the assessee had acquired a new residential house within the stipulated period, from the date of sale of that property, for al....
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.... invested either in purchasing a residential house or in constructing a residential house. If after making entire payment merely because a registered sale deed has not been executed and registered in favour of the assessee before the stipulated period the assessee cannot be denied the benefit of section 54F of the Act. Taking a cue from the aforesaid judgment, it was further submitted that once the assessee demonstrates that the consideration received on transfer has been invested either in purchase of a residential house or in construction of a residential house, even though the transactions are not complete in all respects and as required under the law that would not disentitle the assessee from the said benefit. 10. The learned Departmental Representative, on the other hand, submitted that the assessee has entered into a registered sale deed on 18/01/2010, which further reveals the fact that the construction of the flat would be completed within a period of 36 months from the date of execution of sale deed. It was further submitted that though the assessee claimed to have invested an amount of Rs. 64 lakhs towards purchase of the property but the registered sale deed reflects a....
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.... total consideration for sale of the aforesaid flat is Rs. 1,15,35,000/- out of which the assessee having already paid Rs. 64 lakhs to M/s Dhatri Constructions Pvt. Ltd. agreed to pay the balance of Rs. 51,35,000/- in the name of M/s Dhatri Constructions Pvt. Ltd. On the very same day i.e. on 18/01/2010 a registered sale deed was executed between the assessee and with 7 other persons being represented by their development agreement-cum-general power of attorney holder M/s Fima Properties Pvt. Ltd. for purchase of undivided share of land 92.7 sq.yds., flat No. 1203 on 3rd floor in the residential complex Fima Hilltop at Survey No. 129/77, TS No. 26, Ward No. 12, Syed Nagar, Fast Lancer, Shaikpet Village, Hyderabad for a lumpsum consideration of Rs. 40 lakhs. The aforesaid documents reveal the fact that the property for which initial investment of Rs. 64 lakhs was made with M/s Dhatri Constructions Pvt. Ltd. is not the same which the assessee finally purchased vide registered sale deed dated 18/01/2010 i.e. the property being Flat No. 1203 in the residential complex, Fima Hilltop. Furthermore, though the assessee claimed that he has paid an amount of Rs. 64 lakhs to M/s Dhatri Constr....