TaxTMI 
TaxTMI 
2019 (1) TMI 1458
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....warpet, Chennai owned by him.. By virtue of the JDA, assessee was entitled to 3,850 sq.ft of constructed area and M/s. Sumanth and Company entitled for 11,500 sq.ft of constructed area. Assessee was also entitled for a consideration of Rs. 16 Crores and it seems assesee received a sum of Rs. 5 Crores out of this at the date of signing the JDA. Assessee also executed a Power of Attorney in favour of M/s.Sumanth and Company on very same date, which enabled M/s.Sumanth and Company to do all acts, deed and things relating to, or connected with the construction activity to be done in the property, including signing of plans, applications etc. The Chennai Metropolitan Development Authority (CMDA) issued planning permit for the building on 31.12.2013. As per the assessee, vacant possession of the property was handed over to M/s. Sumanth and Company on 03.02.2014. In the return of income filed for the impugned assessment year assessee admitted capital gains arising out of the above transaction, but claimed deduction of Rs. 1 Crore u/s.54EC of the Act on such capital gains. This claim was on the investment in Electrification Corporation Bonds of Rs. 50 lakhs each on 28.02.2014 and 30.06.201....
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....s correctly taken as date of transfer by the lower authorities. According to him, assessee was not eligible for claiming deduction u/s. 54EC. 6. We have considered the rival contentions and perused the orders of the authorities below. If the date of transfer is considered as date of JDA, admittedly, investments made by the assessee in Electrification Corporation Bonds on 28.02.2014 and 30.06.2014 were beyond the six months period stipulated u/s.54EC of the Act, for qualifying for such deduction. However, claim of the assessee is that it had handed over possession only on 03.02.2014 and the six months period had to be construed from this date. Clauses 5, 8,9 and 12 of the JDA dated 15.04.2013 which are apposite is reproduced hereunder:- ''5. The owner agrees to deliver vacant possession of the Said Property on receipt of plan sanctions from CMDA. 8. The Owner agrees to entrust the Said Property to the Developer for the purpose of demolition of the existing building and structure at the Developers cost after receipt of approval for the said purpose and sanction of building plans from CMDA and all other concerned authorities and on payments of all amounts as conte....
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....ection 54EC of the Act. This is due to the reason that even if possession was given by the assessee on the very next day after getting the CMDA approval, viz, on 01.01.2014, the investments made on 28.02.2014 and 30.06.2014 were within six months period. By virtue of Section 2(47) (v) of the Act transfer is complete when the possession of immovable property is given in part performance falling within Section 53A of the Transfer of Property Act, 1882. Coming to the question whether assessee could claim such exemption over investment done over two successive financial year, this stands answered by Hon'ble Jurisdictional High Court in the case of Coromandel Industries Ltd (supra). Their Lordships had upheld the view of this Tribunal that investments, even though they are made in two difference financial years, if they fall within six months period from the date of transfer, would be eligible for deduction under Section 54EC of the Act. Hence, we are of the opinion that assessee was eligible to claim deduction u/s.54EC of the Act. Disallowance of such claim is set aside. Grounds 2 and 3 are allowed. 7. Through its grounds 4 to 7, grievance of the assessee is that ld. CIT(A) did not ....
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...., ld. Departmental Representative submitted that in the first place assessee had not made any claim for such additional construction in the return of income. Further, as per the ld. DR original cost of the flat was Rs. 1.25 Crores and additional construction claimed by the assessee worked out at Rs. 3,06,40,581/-. This according to ld. DR was beyond preponderance of probability. 10. We have considered the rival contentions and perused the orders of the authorities below. What we find is that assessee had made a claim under Section 54 of the Act in its return of income, and this included cost of the flat to be constructed by the developer, additional payments which were to be made to the developer and deposit made in the capital gain scheme, altogether aggregating to Rs. 3,18,75,000/-, and this claim was allowed by the ld. AO in the assessment. However, assessee chose to stake a further claim of Rs. 3,06,40,581/- before ld. CIT(A) with supporting records. Ld. CIT(A) despite noting that it was a fresh claim, admitted the additional evidence and referred it to the ld. AO for a remand report. What was stated by the ld. AO in the remand report is reproduced hereunder:- ''Ple....