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2020 (11) TMI 773

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....provisions of section 263 of the Act without appreciating that the jurisdiction to invoke the provisions of section 263 of the Act is not satisfied. Thus, the order passed u/s263 is bad in law and the same may be quashed. 2. The Pr. CIT failed to appreciate that the original assessment order dated 07.09.2017 has been passed u/s143(3) by the A.O. after due application of mind and after carrying out proper verification with respect to the claim of deduction under section 54 of the Act. Thus, the action of the Pr. CIT in invoking the provisions of section 263 to verify the same claim again is nothing but the change of opinion which is not permissible as per law. Thus, the order passed u/s 263 is bad in law and the same may be quashed. 3.....

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..... (b) During the year assessee has made investment in residential property of Rs. 3,62,97,800/-. As per allotment letter dt. 05.02.2015, the builder has received the cheque No. 00124 dt. 04.02.2014 of Rs. 3,50,00,000/- and cheque No. 00125 dt. 05.02.2014 of Rs. 12,97,800/- whereas as per agreement dated 02.11.2015, the date of cheque for Rs. 3,50,00,000/- is shown as 04.02.2015. In the absence of bank statement on record, it is not possible to verify the correctness of the same. (c) Further as per letter dt. 24.08.2017 of M/s. Ganesh & Rajendra Associates, C.As, it was submitted that as per information provided by the builder to the assessee, the occupation certificate has been received by the builder for the said building and the pos....

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....ver, the Pr. CIT was not convinced with the above reply of the assessee on the ground that "in paragraph 18 of the agreement, the builder talks about making endeavor to complete the construction at the earliest by 31.03.2017 ; however, the occupancy certificate received by MCGM on 25.07.2017 and therefore, the assessee could not have purchased/occupied the flat before receiving the said occupancy certificate." Thus it is observed by the Pr. CIT that as the assessee had purchased the flat and not constructed, the time limit available to her was two years and the time limit for making investment was till 19.11.2016 and since the date of sale of the old property was 19.11.2014, the date of occupancy certificate i.e. 25.07.2017 is beyond the li....

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....0] 243 83 (SC). 4.1 The Ld. counsel further submits that as per section 54 of the Act, the time limit for purchasing a new residential unit is one year or two years after the date of transfer and in case of construction it is three years from the date of transfer ; in the present case since the transfer was done on 19.11.2014, the two years completed on 19.11.2016 in case of purchase and three years completed on 19.11.2017 in case of construction. Thus it is stated by him that as the assessee booked a residential flat in the under construction project, the time limit available to the assessee to make an investment is three years from the date of transfer ; the capital gains received on transfer of old property was invested by the assessee ....

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....have been made, (ii) the order is passed allowing relief u/s 54 without inquiring into the claim. 6. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. We find that in response to notice u/s 142(1) dated 02.08.2017, the assessee filed before the AO letter dated 10.08.2017 received in the office of the AO on the same date the following details : 1. Details of capital asset sold during the year 2. Proof of investment made for claiming exemption u/s 54 3. Details of investment during FY 2014-15 i.e. AY 2015-16 The assessee had filed before the AO a copy of purchase agreement dated 02.11.2015 registered on 07.11.2015, along with the allotment letter dated ....

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....02.2015 towards consideration and a sum of Rs. 12,97,800/- was paid through cheque No. 00125 dated 05.02.2015 towards service tax. Thus substantial consideration towards investment was made within two years itself from the date of transfer. The purchase agreement is dated 02.11.2015 registered on 07.11.2015 along with allotment letter dated 05.02.2015. In Girish L. Ragha (supra), the Hon'ble Bombay High Court has held that "where assessee sold residential property and entered into an agreement with a builder for purchasing flat for which he invested sale proceeds within prescribed period of two merely because assessee got occupancy certificate after 4 years and such delay was beyond control of assessee, assessee's claim for deduction under....