TaxTMI 
TaxTMI 
2016 (7) TMI 458
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....ee on sale of her rights to get the conveyance of the flat in her favour is to be treated as capital gain eligible for claim of deduction under section 54F of the Act. 3. The brief facts of the case are that the assessee during the year declared long term capital gains of Rs. 28,05,075/- on account of sale proceeds of rights in O zone flat on 27.03.09 for Rs. 69,30,000/-. The value of the above flat as on 17.08.04 was taken at Rs. 34,02,000/- and the indexed cost at Rs. 41,24,925/- and the capital gains were arrived at Rs. 28,05,075/-. The said amount was claimed exempt under section 54F of the Act on the ground that the entire sale proceeds of Rs. 69,30,000/- had been deposited in capital gain account scheme. The Assessing Officer (here....
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.... section 56 of the Act. That there was no property in existence or right of the assessee in such a property and hence no capital asset was sold by the assessee and thereby no capital gains had been earned by the assessee. Therefore, the benefit under section 54F was not available to the assessee. He accordingly taxed the difference between the amount paid and amount received by the assessee as income from other source calculated at Rs. 36,57,428/-. Aggrieved by the order of the AO, the assessee preferred appeal before the Ld. CIT(A). 4. The Ld. CIT(A), considering the submissions of the assessee and going through the evidences on the file, allowed the claim of the assessee observing as under: "5 .3 The above facts , therefore , ....
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.... includes- (i) the sale exchange or relinquishment of the asset or (ii) the extinguishment of any rights therein... (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-opertive society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Under Explanation 1 inserted by the Finance Act 2012, w.r.e.f. 01.04.1962, for the pu....
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.... it is seen that the aforesaid decision was rendered in a different context. The issue there related to claim of exemption u/s 54F, which was denied to the said assessee on the ground that the above claim is being made on the basis of allotment letter only and proposed plan of the building and the flat was not in place. In the case of the appellant, the claim u/s 54 of the Act, has been disputed not on the ground that investment of sale consideration has been made in a capital gain saving scheme but, when the offer/allotment letter dtd.31.01.2005 to purchase the above flat was made by the developer, the flat did not exist. The assessing officer has, thus, applied the above decision on a reverse situation, which was not before the ITAT. ....
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....installments paid as observed above was running into four years. The assessee had to pay the installments at the different stages of the construction of the property/flat in question e.g. on the completion of first slab; on the condition of third slab; on the completion of 11th slab and so on and the last installment was payable on possession of the flat being given to the assessee. From the above circumstances it clearly reveals that while making the payment to the builder, the intention of the assessee was not to earn any quick profits but the purpose was of investment. The assessee not only paid the earnest money in the year 2004 but subsequently paid installments to the builder at certain stages of the completion of the construction. Ho....