AI Drafter 
TaxTMI 
TaxTMI 
2020 (9) TMI 574
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....earned CIT (IT/TP), Pune erred in law and on facts in assuming Jurisdiction u/s 263 of the ITA, 1961 on the analogy that the order passed by the learned AO u/s 143(3) of the ITA, 1961 dated 29/03/2016 was erroneous and prejudicial to the interest of the revenue. 2. The learned CIT (IT/TP), Pune erred in law and on facts in directing the learned AO to disallow exemption u/s 54 of the ITA, 1961; amounting to Rs. 40,00,000/- and instead allowed exemption u/s 54F of the ITA, 1961; of Rs. 36,39,667/- on the analogy that appellant has only transferred development rights in land at Shivaji Nagar. The learned CIT (IT/TP), Pune ought to have appreciated that appellant in fact has transferred all the rights in the residential bungalow 'J....
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....533.17 sq.mtrs. of land / building being ancestral property situated at Prabhat Road, Shivaji Nagar, Pune. The Ld. CIT held that sale of development rights is not capital asset mentioned in section 54 of the Act. However, exemption u/s 54F of the Act can be claimed on the same. But the exemption u/s 54F of the Act is available on proportionate basis by taking the denominator as sale consideration and not the capital gain. Hence, the exemption u/s 54F of the Act will be lesser than that claimed u/s 54 of the Act. It was further observed that in the assessment order dated 29.03.2016, the Assessing Officer has mentioned in para 5 of the order that long term capital gain has been earned on transfer of development rights of ancestral house prope....
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....lly mentioned that all that piece and parcel of land bearing, together with bunglow by name Jagdish standing thereon. Therefore, the assessee submitted it is not only the development rights that has been transferred but it is the house property also along with land and appurtenances thereto. 4. The Ld. AR of the assessee took us through the pages 54 to 69 of the paper book, wherein the entire documents have been annexed regarding the proceedings u/s 143(3) of the Act before the Assessing Officer. There is also a detailed notice u/s 142(1) of the Act along with questionnaire specifically asking from the assessee to furnish details of the sale of immovable property during the year. The assessee vide reply dated 29.02.2016 stated that durin....
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....e. That further the Development Agreement is crystal clear that the land has been transferred along with the house property and that it is also the responsibility of the developer to demolish the house property standing on the said property. These facts have been analyzed by the Assessing Officer through notice u/s 142(1) of the Act and questionnaire and even the replies submitted by the assessee were placed on record. The only reasons for which the Ld. CIT decided that the assessee is entitled to exemption u/s 54F of the Act and not u/s 54 of the Act because as per the Development Agreement, the term 'owner' appears therein referring to the assessee. However, the other clauses of the Development Agreement where the entire transfer of house....
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....9 CTR 261 (Kar), K. Parthasarathy Vs. ITO 49 taxmann.com 50 (Chennai-Trib.) and Mahesh Nemichandra Ganeshwade Vs. ITO (2012) 147 TTJ 488 (Pune-Trib). Placing reliance on these decisions, the assessee claimed that it is true that there was a delay but that delay was unintentional and caused by circumstances but it is also true that investments were made by the assessee in NHAI bonds, therefore, based on these judicial pronouncements, the delay should be condoned and the exemption u/s 54EC of the Act should be allowed. 7. We find that the Ld. CIT in his order has categorically observed at para 12 that the assessee though has made investment of Rs. 50 lakhs in NHAI bonds within the prescribed time, then how it is possible that in respect of....
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....d whether they were according to the prescribed time limits as per section 54EC of the Act. The Assessing Officer has not given any reasoning or view in this matter. He has simply accepted the claim of the assessee granting exemption under the said provision. Factually also before us, the Ld. AR for the assessee fairly conceded that there was a delay with regard to time limits prescribed in the statute for the said investment. When this issue has not been verified by the Assessing Officer nor any independent enquiry conducted, nor any questions raised and when these facts are clear that in this issue the provisions of section 54EC of the Act has not been complied with by the assessee, the action of Assessing Officer therefore, is erroneous ....