TaxTMI 
TaxTMI 
2022 (3) TMI 433
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....under Section 54 of the Income Tax Act. 2. The learned CIT(A) erred in not directing the learned AO to allow deduction under section 54 on the ground that the appellant has made investment in constructed residential house within three from the date of sale of original residential property. 2. The facts, in brief, relevant to the issue under consideration are as follows. The assesses is a salaried employee and his return was picked up for scrutiny assessment. In the ensuring scrutiny assessment proceedings it was noticed that in May 2011 the Assessee along with his wife booked a residential flat (Flat No. 203) in an under construction building named 'Bankston' located at Rodas Enclave, Thane (W) from Roma Builders Pvt. Ltd [herei....
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....ered. Since this was 2 years and 3 months prior to the date of transfer/sale of the Original Asset (i.e. 21.05.2014), the Assessee could not be granted the benefit of Section 54 of the Act. The Assessing Officer was also of the view that the Assessee had utilized his regular income to repay the loan instalments and not the consideration received from the same of the property. 4. In the appeal filed by the Assessee against the assessment order, the CIT(A) moved on the premise that date of registration of Agreement for Sale (07.02.2012) is to be considered as date of purchase of New Residential House and decided the appeal against the Assessee holding that purchase of property was beyond the specified period of 2 years. The CIT(A) also rej....
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....d period, the Assessing Officer was justified in disallowing deduction under Section 54 of the Act. 5. Having heard the parties and perused the records, it emerges that the undisputed facts are: (a) The Assessee booked the New Residential Property on 28.05.2011; (b) Allotment was made to the Assessee on 14.07.2011; (c) Agreement For Sale, dated 07.02.2011, was registered on 15.02.2011; (d) In December 2012, the Assessee made majority of payments by availing a mortgage/housing loan; (e) Original Asset was sold on 21.05.2014 and the sale proceeds were utilised towards repayment of the existing mortgage/housing loan; (f) Occupancy Certificate was issued on 17.02.2016; (g) Assessee took actual physical possession on 02.04.2016. 6. We have....
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....to construct or constructs a block or building of flats, all or some of which are to be taken or are taken on ownership basis, shall, before, he accepts any sum of money as advance payment or deposit, which shall not be more than 20 per cent. of the sale price enter into a written agreement for sale with each of such persons who are to take or have taken such flats, and the agreement shall be registered under the Registration Act, 1908 (hereinafter in this section referred to as "the Registration Act")] 1908 and such agreement shall be in the prescribed form." 7. It would also be relevant to refer to the terms contained in paragraph/clause 3, 14 and 39 of the said Agreement for Sale relevant extracts of are reproduced herein under: ....
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....ssessee has, on the date of taking such possession, purchased the property for the purpose of Section 54 of the Act as has been held by the jurisdiction High Court in that the case of CIT vs. Smt. Beena K. Jain : 217 ITR 363. While examining the issue in respect of Section 54F of the Act the Hon'ble High Court held that for the purpose of determining the date of purchase of new residential house the relevant date in the date when the petitioner paid the full consideration amount on the flat becoming ready for occupation and obtained possession of the flat. The relevant portion of the aforesaid judgment reads as under: "2. Under section 54F in the case of an assessee ..........The department contends that the assessee did not purcha....
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....ng the applicability of provisions of Section 54 of the Act and observed that in such circumstances and in the given facts of the case and also the case law relied on by learned Counsel for assessee in the case of V M Dujodwala (supra) coordinate bench of this Tribunal and also of Hon'ble Bombay High Court in the case of Smt. Beena KJain, (supra), we are of the view that the assessee's claim of deduction u/s. 54 of the Act is to be reckoned from the date of handing over of the possession of the flat by the builder to the assessee i.e. 11.09.2009, and if we take that date, the assessee is entitled to deduction u/s. 54 of the Act because the assessee has sold his residential flat on 24.02.2010. We allow the assessee's claim and or....