2017 (3) TMI 25

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....rises for consideration is computation of capital gain. According to the Ld. Counsel, the assessee entered into an agreement for sale of land on 10.02.2007. The sale consideration fixed in the agreement was Rs. 80,15,000/-. Since, there was a mistake in the parent document, the proposed buyer refused to go ahead thereafter. The assessee gave an undertaking that he will rectify the parent document by a registered deed. Therefore the assessee persuaded the original vendor to rectify the error in the sale deed. In fact, a rectification deed was executed by the original buyer of the property and a sale deed dated 06.05.2008 was also registered. In the mean time, the State Government revised the guideline value of the land w.e.f. 01.08.2007. Inf....

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....d not the notional value. Placing reliance on the order of this Tribunal in ITA No.402/Mds/2015 dated 29.05.2015, the Ld. Counsel for the assessee submitted that the notional value cannot be considered for the purpose of determining the capital gain. Referring to Section 54F of the Act, the Ld. Counsel submitted that the Assessing Officer has taken the payment made up to the date of filing of the return of income under Section 139 (1) of the Act. According to the Ld. Counsel, the due date for filing of return of income under Section 139(4) of the Act ought to have been considered by the Assessing Officer. The Ld. counsel further submitted that the amount invested up to due date for filing return of income under Section 139(4) has to be cons....

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.... into an agreement for sale of land on 10.02.2007. When the assessee entered into an agreement for sale of property, even though it may not always go to its logical conclusion of execution of sale deed, the parties to the agreement has a right to enforce the agreement before the court of law. In the case before us, consequent to the agreement dated 10.02.2007, the sale deed was executed on 06.05.2008. Delay for execution of sale deed was admittedly there was an error in the parent document which needs to be rectified. Therefore, this Tribunal is of considered opinion that when the assessee agreed to sell a property and entered into an agreement for sale, he cannot go back from the sale consideration referred in the agreement for sale. Subse....

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....ation at Rs. 80,15,000/- as agreed between the parties in the agreement for sale dated 10.02.2007. 10. Now coming to the claim of exemption under Section 54F of the Act. The Parliament in their wisdom thought it fit to grant exemption in respect of the capital gain which was used for construction or purchase of property till the due date for filing of return of income under Section 139 (1) of the Act. The assessee could not use the sale consideration within the due date under Section 139 (1) of the Act, the same shall be deposited in any one of the capital gain account. The Apex court while considering the "due date" held that the due date means, the date prescribed under Section 139 (1) of the Act. The Apex Court in the case of Prakash ....