TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 997
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....he disallowance of claim u/s 54 of the Act in the facts and circumstances of the case. 3. Heard both the parties and perused the materials available on record. It is noted that the assessee was a doctor by profession and filed his return of income declaring gross total income of Rs. 6,62,765/-. The Assessing Officer in the scrutiny proceedings determined the total income of assessee at Rs. 1,13,94,070/- vide its order u/s 143(3) of the Act. It is noted that the assessee claimed allowance of deduction u/s 54 of the Act. The Assessing Officer on an examination and verification of the claim of the assessee denied allowance of claim u/s 54 only on the reason that non-submission of registered purchase deed for the reasons stated hereunder: ....
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....n here that on the date of agreement the appellant never ensure the time of delivery or the status of the construction and its completion. The time limit prescribed in the Act for 54F and MOU was never adhered too. It is also seen that clause mentions in the MOU were never adhere too. The only argument of the appellant during the appellate proceedings is that the substantial payment has been made within two years, therefore he deserves for exemption is not with the spirit of the provision of section 54F. It is further to pointed out that the observation of the A.O. regarding completion of the building has not been controverted. The A.O. observed that only 39% of the full value of the construction has been paid against the proposed purchase ....
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....s only which can never be said that entire amount of capital gain had been invested rather appellant has finalized other co-owners. The A.O. has further observed that the condition mentioned in the MOU has not been complied even after lapse of mentioned time in the MOU." 5. Aggrieved by the order of CIT(A), the assessee is before us challenging the action of CIT(A) in denying deduction u/s 54 of the Act. The ld. AR filed paper book containing Pages 1 to 144 along with the details of chronological events. It is noted from the record that the assessee obtained land at Durgapur on lease from Government of West Bengal on 24.05.1980 and subsequently constructed a residential building thereon. The assessee entered into an agreement of sale with....
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..... So there is no dispute about the observation of CIT(A) that there was no break-up given by the assessee. 7. Coming to the observation of Assessing Officer, it is noted that the assessee submitted a letter dated 01.11.2017 issued by the Builder/Developer which is placed at Page No.108 of Paper Book stating that they have received the completion certificate on 16.10.2017 from the competent authority and started handing over for internal decoration, colouring etc. to respective flat owners clearly establishes that there was a delay in construction due to various reasons which were beyond the control of developer/builder. We find that there was a delay of construction and handing over the possession of flats to the assessee. 8. The ld. AR....
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....tal Representative, placed reliance in the case of Rasiklal M Parikh vs. ACIT reported in [2017] 88 taxmann.com 732 (Bombay) and submits that the developer did not confer any title on the assessee and no possession was given to the assessee within stipulated period of three years, when there is no title and possession as required by the Statute to the assessee, the deduction u/s 54 is not permissible. Further he referred to the order of Hyderabad Tribunal in the case of Mahesh Malneedi vs. ITO reported in [2018] 90 taxmann.com 171 (Hyderabad - Trib.) and submitted that there is no proof of sale furnished by the assessee before all the authorities including this Tribunal and there is no proof showing that the completion of flat before the au....
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.... proceeds in the construction of residential house. In the present case, the assessee claimed to have purchased a flat for Rs. 2,00,75,000/- which is more than the sale proceeds and the capital gain determined by the Assessing Officer. Therefore, in our opinion the assessee is entitled to get of claim of allowance u/s 54 of the Act. 15. On perusal of the decision of High Court of Karnataka and decision of Coordinate Bench of this Tribunal, we find that the assessee is entitled to claim allowance of deduction u/s 54 of the Act only for the reason that the whole capital gain has been invested in purchasing a flat having super built-up are of 2,375 sq. ft for himself. 16. Coming to the objections raised by the Assessing Officer in respect ....