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TaxTMI 
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2019 (9) TMI 1138
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....te separately in this order. 3. These cases were heard together. Since facts and issues being common, these cases are being disposed of vide this consolidated order. We would first adjudicate whether the assessees are eligible for deduction u/s.54F of the Act. For this purpose, we would take up ITA No.1345/PUN/2017 for assessment year 2012-13 as lead case. ITA No.1345/PUN/2017 A.Y.2012-13 A. Ground No.1- Denial of exemption u/s.54F of Rs. 18,96,18,422/- 4. The facts with regard to this issue are that the assessee earned long term capital gain on sale of certain assets. In the return of income, the assessee had claimed exemption u/s.54F of the Act. The Assessing Officer has discussed this issue of claim of exemption u/s.54F in Para 4 of his order. The assessee had initially entered into an agreement for purchase of flat with M/s. Suryadoya Estates vide agreement dated 26.09.2012. Subsequently, the said agreement was cancelled and the assessee entered into an agreement with M/s. Kumar Builders for purchase of flat on 10.04.2014. The assessee submitted the relevant agreements before the Assessing Officer and also the proof of payment made to Suryadoya Estates and M/s. Kumar Builde....
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....ve been filed at Pages 97 to 101 of the paper book. Further, the assessee had also filed an affidavit clarifying the various reasons due to which development of the said project was delayed. The assessee has also stated that he has not cancelled the said booking of the flat and the amount is still lying with the developer. That apart from the assessee, there are other persons who had also booked flat of the said project i.e. KUL Couture. The Ld. AR vehemently argued that the assessee has not been refunded till date by the developer the amount of Rs. 22.10 Crore paid against the said booking of flat. The Ld. AR further submitted that for the purpose of Section 54F of the Act, the relevant point is that the assessee should utilize the capital gain before the due date of filing return. In this case, Rs. 22.10 Crore was already paid by the assessee to the developer which was before the due date of filing return. Therefore, there was no question of denying the assessee of exemption u/s.54F of the Act since the assessee acted bona-fide and utilized the amount before the due date of filing of return and the said amount is with the developer and has not been refunded back to the assessee. ....
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.... In reverting to the facts of the present case, the Ld. AR submitted that the assessee has already paid Rs. 22.10 Crores to the builder before the due date of filing return and therefore, has parted away substantially with the money. Similarly, there was agreement entered into between the parties, though not registered. These facts are not disputed by the Revenue. Therefore, the assessee should get benefit of exemption u/s.54F of the Act. 6.2 The Ld. AR of the assessee also referred to the decision of the Co-ordinate Bench of the Chandigarh Tribunal in the case of Bhavna Cuccria Vs. ITO (165 ITD 124) (Chd.-Trib.) held that "wherein substantial amount of capital gain has been invested by the assessee for purpose of purchasing a new house, deduction u/s.54 cannot be denied for the reason that construction was not completed within three years or house was not purchased within two years." The Ld. AR further referred to the decision of the Mumbai Bench of the Tribunal in the case of Income Tax Officer, Ward-25(1)(5) Vs. Shri Uttamchand B. Jain in ITA No.1026/Mum/2017 for the assessment year 2011-12, in this case, there was no agreement entered into even by the assessee, however, he h....
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....this case, the assessee surrendered tenancy rights in September 2005 and invested consideration towards construction cost of new flats before due date of filing return. However, the assessee was denied exemption u/s.54F of the Act on the ground of non-completion of construction of building within stipulated period. It was held by the Hon'ble Bombay High Court that "in order to get exemption u/s.54F, the assessee had to obtain the allotment letter from the developer under the provision of the Maharashtra Ownership of Flats Act, 1963 (MOFA). The allotment letter issued by the developer did not confer title until the agreement for sale under the provisions of MOFA was registered. The agreement sale was entered into only on 24.11.2008 beyond the period of three years from the date of surrender of tenancy. Moreover, the developer had no approval for construction of the 9th floor wherein the assessee had booked three flats and such approval was received by the builders only in September, 2010. Thus, there was no question of the assessee establishing the title over the property which was not approved for construction at the material time." 8. We have perused the case records and heard th....
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....y placed before the Revenue Authorities and because of these facts, it was stated by the assessee that there was delay in completion of the project by the developer and hence, possession was not provided to the assessee. 9. The case laws relied on by the Ld. AR of the assessee as hereinabove referred in the preceding paragraphs in this order, the Hon'ble Karnataka High Court in the case of CIT Vs. Smt. B.S. Shanthakumar (supra.) had observed and held that "what is important for granting benefit of Section 54F of the Act is, the money got through sale of capital asset that should be parted by the assessee and invested either in purchasing a residential house or in constructing a residential house." Similarly in other decisions of the Tribunal as referred by the Ld. AR of the assessee wherein it has been held "when it is established that the major part of the money has been utilized for procuring new residential house before the due date of filing return then the benefit of exemption u/s.54F of the Act should be given to the assessee." The intent of the legislature in order to incorporate Section 54F of the Act is to promote housing Project and development activities. That once a pe....
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.... of Rasiklal M Parikh Vs. CIT-19(2), Mumbai (supra.) will not be helpful to the Revenue. Further, in the case of Rasiklal M Parikh Vs. CIT-19(2), Mumbai (supra.) because of the above said features, genuineness of the transactions and the bona-fide nature of the assessee was not established. The assessee therein had kept money received from the selling of the assets in the form of capital gain for more than three years and thereafter, entered into an agreement. But in the instant case of the assessee herein within the time framed, the agreement was entered into between the assessee and the developer and even, advance was paid before the due date of filing return. The bona-fide attitude of the assessee and the genuineness of the transactions are clearly established in this case. 11. We further observe that the entire ambit of Income Tax Act is based within the larger framework of welfare legislation. The object of each provision is ultimately for the development of the society as well as for the individual and also at the same time taking care of the interest of tax payers. The interpretation, therefore, in the case of Income Tax Act in reference to a particular ratio or decision ....
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....ssing Officer is directed to provide appeal effect accordingly. Therefore, on this ground of getting benefit of exemption u/s.54F of the Act, the assessee succeeds. Thus, ground No.1 raised in appeal by the assessee is allowed. 15. The Ld. AR of the assessee submitted before us that he is not pressing ground No.2. In view of the submissions of the Ld. AR of the assessee, ground No.2 is dismissed as 'not pressed'. B. Ground No.3- Addition of Rs. 3,54,94,895/- on account of deemed dividend u/s.2(22)(e) of the Act. 16. The Assessing Officer has made an addition u/s.2(22)(e) of the Act on account of deemed dividend. He has discussed this issue in para 6 of his order. The Assessing Officer has stated that the prop. concern of the assessee mainly Kumar Builder had received a loan from Kumar Urban Development Ltd. of Rs. 3,54,94,895/-. The Assessing Officer stated that assessee is having substantial interest in both the concerns and therefore, the provisions of deemed dividend are applicable. 17. The learned CIT(Appeals) has confirmed the action of the Assessing Officer. 18. The Ld. AR of the assessee submitted that the prop. concern of the assessee had already advanced an amount mo....
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....322/- 21. Ground No.4 pertains to the addition of Rs. 25,68,322/- on the basis of ITS data. 22. The Assessing Officer has discussed this issue in Para 7 of his order. The Ld.CIT(Appeals) has confirmed the addition on the ground that the assessee was not able to reconcile the details. 23. At the time of hearing, the Ld. AR of the assessee prayed that an opportunity may be provided to the assessee so that they can file reconciled details before the Assessing Officer and place their case on merits and for this purpose, the matter may be remitted to the file of Assessing Officer for necessary verification and adjudication. 24. The Ld. DR fairly conceded to the prayer of the Ld. AR of the assessee. 25. We have perused the case records and heard the rival contentions. In view of the submissions made by the parties herein, we set aside the order of the Ld. CIT(Appeals) on this issue and restore the matter to the file of Assessing Officer for necessary verification and adjudication wherein the assessee is directed to file the reconciled details. The Assessing Officer is directed to adjudicate the issue after considering the reconciled details in compliance with the principles of natur....