2014 (4) TMI 467

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....n only the probable date of giving possession was mentioned but no possession was given.    (3) Whether, in facts and circumstances of the case Ld. CIT(A) has erred in law in deleting the addition made on a/c of Long Term Capital Gain of Rs. 36,40,283/- in extending the ratio laid down in the case laws cited by the assessee regarding condonation of delay in taking possession with reference to section 54 & 54F of IT Act to this case as well where no possession was taken till date.    (4) Whether, in facts and circumstances of the case Ld. CIT(A) has erred in law in deleting the addition made on a/c of Long Term Capital Gain of Rs. 36,40,283/- in extending the meaning of Cooperative Housing Societies like DDA as mentioned in CBDT circulars no. 471 dated 15.10.1986 and 672 dated 16.12.1993 to the builders and developers as well to which these circulars are not applicable.    (5) Whether, in facts and circumstances of the case Ld. CIT(A) has erred in law in deleting the addition made on a/c of Long Term Capital Gain of Rs. 36,40,283/- by holding that any perceived reasonable cause can do away the basic requirement of acquisition of residential pro....

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.... assessee had advanced monies to the builder on agreement and deposited money in capital gains scheme. Since no house had been purchased till the date of assessment order as two years period had lapsed the AO required the assessee to explain why deduction u/s 54 and 54F on account of payment made to the builder M/s Golden Gate Properties Ltd., Banglore be still allowed. 3.1. The assessee furnished an explanation stating that it had entered into an agreement to purchase a flat at Banglore from M/s Golden Gate Properties Ltd., Banglore on 18.12.2008 for Rs.60,19,380/- and had paid a total sum of Rs.42,50,000/- on different dates between 31.05.2008 to 31.12.2008 to the builder and the amount of Rs.14,50,000/- was deposited in separate capital gain a/c in July 2009 with Bank of Baroda. Reliance was placed upon CIT vs R.L. Sood (2000) 108 Taxman 227 (Delhi) 245 ITR 727. 3.2. Not convinced by the explanation and holding the decision to be distinguishable the AO allowed deduction to the extent of Rs.14,50,000/- on account of deposit in the capital gain A/c against the long-term capital gain of Rs.50,90,283/- and the balance amount of Rs.36,40,283/- was held as taxable. 4. Aggriev....

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....ons the CIT(A) came to the following conclusions:-    "I have gone through the facts of the case, findings of the A.O. and submissions of the AR and have taken note of the following facts on record:-    That the appellant invested a sum of Rs.42,50,000/- for the purchase of residential flat by making advance to the builders within period of five to six months from the dates of sale of residential house and plot yielding capital gains. An Agreement was executed on 18.12.2008 and it was agreed that the builders shall complete the flat and allow possession thereof on or before 30.09.2009 i.e within a period of 15 months or so from the transfer of original assets(s). The builders did not complete the construction and therefore did not allow possession of the flat within the stipulated period of 3 years from the date of transfer of original asset. The AO disallowed the claim of Rs.42.5 lacs and made addition of capital gains of Rs.36,40,283/-. On the other hand, the appellant's claim is that substantial compliance in order to get residential house completed within three years as stipulated in sec.54/54F, has been made and that it is only on account of failure o....

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....at the builder is not known to the assessee and the arrangement is at arms length as such there can be no connivance presumed of the assessee with the builder. It was submitted that whatever the assessee could have done had been done and if for reasons beyond the control of the assessee the builder has not completed the construction, the assessee cannot be penalized for the fault of the builder. It was submitted that these arguments have been considered on facts while passing the impugned order and they have not been demonstrated or assailed to be false. It was submitted that in this context various judgements of the Delhi High Court had been referred to before the AO and thereafter also to the CIT(A) which have been considered. On query it was submitted that no fresh documents had been filed before the CIT(A) and the assessment order itself would show that the reference has been made to the assessee's Agreement with M/s Golden Gate Properties Ltd. It was submitted that the copy of the said agreement is placed at pages 5-23 and the date of agreement is 18.12.2008 and a perusal of clause 4 found at page 10 of the paper book would show that the delivery date was contemplated as on or....