2011 (11) TMI 710

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....of benefit under section 54F of the income tax Act. 2. Briefly stated, the facts of the case are that the assessee who was 50% co-owner with her husband in a residential flat at Walkeshwar Road had sold the same for a sum of Rs. 2.30 crores as per transfer deed dated 15.1.2006. The assessee invested the sale proceeds in purchase of a house property at Rajkamal Heights, Parel as per agreement dated 26.5.2006 for Rs. 45.60 lacs. The assessee, however, before completion of the building had also incurred expenditure of Rs. 43.00 lacs as per three supplementary agreements dated 22.4.2006 entered into with three different parties i.e. M/s. Darshan Enterprises, M/s. Tejal Enterprises and M/s. Dee Vee Enterprises. The assessee, therefore, treate....

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..... The AO further observed that the main agreement clearly provided that the builder was providing the flat with all basic amenities required for making the premises habitable. He, therefore, did not accept the claim that the assessee required additional expenses of Rs. 43.00 lacs to make the premises habitable. The AO considered only the sum of Rs. 45.60 lacs mentioned in the main agreement as cost of the new flat for the purpose of computation of deduction under section 54F of the Act. 2.2 The assessee disputed the decision of the AO and submitted before CIT(A) that the assessee after selling the residential falt on 15.1.2006 had to move to a rented apartment as he was not having any other residential house. The assessee, therefore, ....

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....t. CIT(A), therefore, conformed the order of AO aggrieved by which the assessee is in appeal before the Tribunal. 3. Before us, the ld. Authorised Representative for the assessee reiterated the submissions made before the lower authorities. It was argued that any expenditure incurred before taking possession of a new asset had to be considered as part of cost of acquisition. It was pointed out that the registered deed in respect of new flat was dated 26.5.2006 on which date all the amenities in the flat were ready and, therefore, the same were duly mentioned in the registered deed. However, to save time, the builder vide letter dated 29.3.2006 had suggested to engage other contractors for finishing the work for which the payment had b....

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....agreements dated 22.4.2006 with the builder and three different contractors for carrying out certain work relating to the finishing of the flat. In terms of these agreements, the total expenditure incurred which has been claimed by the assessee as part of the cost was Rs. 43.00 lacs. The assessee had therefore shown total cost of the flat at Rs. 88.60 lacs. The authorities below have not accepted the claim of expenditure as per the tripartite agreement on the ground that the assessee could not enter into such agreements before taking over possession of the flat. The case of the assessee is that she wanted the flat urgently and, therefore, the builder vide letter dated 29.3.2006 had suggested to engage other contractors for finishing the ....