TaxTMI 
TaxTMI 
2022 (7) TMI 393
X X X X Extracts X X X X
X X X X Extracts X X X X
....led its return of income for A.Y. 2013-14 on 05.08.2013 declaring total income at Rs.5,84,910/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 16.03.2016 and the total income was determined at Rs.3,05,99,040/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 04.09.2019 in Appeal No.77/18-19 allowed the appeal of the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds: 1. On the facts and circumstances of the case, the Ld CIT(A) has erred in deleting the addition of Rs.3,00,14,134/- made by the AO on account of business income without appreciating the detailed findings of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rious grounds but the sole controversy is with respect to the deletion of addition of Rs.3,00,14,134/- that was made by AO but deleted by CIT(A). 5. During the course of assessment proceedings, AO noticed that assessee had sold six flats for a total consideration of Rs.4,10,00,000/-. He also noticed that assessee had claimed exemption u/s 54 of the Act on account of the purchase of property. He noted that the investment in property was made by purchasing flat from AA Walker Estate Private Ltd. in which Ashwin Chander Chandiok, the son of Mr. V. C. Chandiok was the Director. He also noted that neither possession of new house property was handed over to the assessee nor registration of the flat was done in the name of the assessee. He also....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ested within the same financial year i.e. F.Y. 2012-13 and another Rs. 2 crores was paid during F.Y. 2015-16 totaling to Rs.6.08 crores. 4.5 The first observation of the AO was that the earning from the sale of six flats was in the nature of Business Income and not Capital Gains. It was stated that the fiats were not for self use and were constructed only for earning income or profit. Further, that the payment for investments/purchase of new property (Asset) was made to M/s. A.A. Walker Estate Pvt. Ltd. in which the Karta's Son (Mr. Ashwin Chandet Chandiok) was director and that neither possession of the new house property was handed over nor the registry of the new property was done. It was also stated that notice u/s. 133(6) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....house on or before the due date of filing of return of income. If the capital gain is not utilized on or before the due date of filing of return of income then the same has to be deposited in the Capital Gain Account Scheme and the same has to be utilized within the stipulated period of two years/three years, as the case may be, prescribed under the Act. At the end of two years in the case of purchase of new asset/three years in the case of construction of new asset, as the case may be, if, there is any amount left to be utilized by the assessee then the said amount shall be treated as income of the assessee under section 45 of the Act in the year of expiry of period of two/three years. In recent times it has been noted that despite payment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 20.01.2012 to 18.04.2016 by way of RTGS. A copy of letter dated 18.10.2016 by the seller has been issued to confirm soft possession of Villa no. B-3 referring to a completion order dated 10.10.2016 (reference no.TPBZ/2964/ARP/JCP-16/2930 issued by office of the Sr. Town Planner, Town and Company Planning Department, North Goa district office, 302, Govt. Building Complex, Mapusa-Goa with reference to the above property. Hence, it is satisfactorily established that the investment in the new asset had been made as per provisions of Section 54(2) of the Act. Accordingly, the addition of Rs.3,00,14,134/- under the head Business Income is hereby deleted and the AO is directed to treat the transaction and resulting earnings as Capital Gains and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce has been placed by the AO to demonstrate that the transaction of purchase of property was in adventure in the nature of the trade so as to be treated as business income. With respect to the objection of the AO that the possession of the property was not handed over and the sale has not been registered, he has given a finding that as per the provision of Section 54(2) of the Act, the important condition for claiming of exemption is the utilization of capital gain arising from the sale of old asset in the purchase of new residential house on or before the due date of filing of return of income. In case the assessee is unable to purchase the residential house before the due date of filing of return then the amount needs to be invested in Ca....