TaxTMI 
TaxTMI 
2024 (5) TMI 699
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....70/M/2023 is filed by Mrs. Rita Sunil Shah or assessment year 2011 - 12 against the assessment order passed under section 144C (13) read with section 147 read with section 254 of income tax act, 1961 dated 3/10/2023 wherein the total income of the assessee is determined at Rs. 3,597,395 denying claim of deduction under section 54 of the act. 04. Grounds in ITA No. 4069/MUM/2023 "1. The Ld. AO erred in disallowing the claim of the deduction u/s 54 of the long term capital gain of Rs. 34,25,243/- earned on the sale of property dated 10.02.2011 on the grounds that the purchase agreement dated 25.07.2009 for the reinvestment exceeds the prescribed period of 1 year before thereby disregarding the merits that for the claim of deduction u/s 54 the date of possession which is 10.02.2011 should be considered and not the date of agreement which was 25.07.2009. 2. The Ld. AD erred in initiating penalty proceedings under section 271(1)(c) of the act on account of the disallowance of the claim of the deduction u/s 54 of the act thereby treating the same as concealment/furnishing of inappropriate particulars of income. 3. Ld. AO erred in initiating penalty proceedings under section 271(1)....
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....-term capital gain. 08. The learned assessing officer found that the flat which has been sold by the assessee was purchased by the assessee jointly with his wife is for purchase agreement dated 16/7/2009 for a purchase value of Rs. 4,941,000/-. Since the date of the allotment of said flat is 31/1/2006 the assessee has declared the gain as a long-term capital gain considering the date of purchase of flat as 31/1/2006. As the assessee has made the substantial payments from the date of allotment in the date of registration therefore the learned assessing officer agreed with the contention of the assessee that the date of allotment should be taken as the date for computing the holding period for the purpose of computation of capital gain. Therefore, the gain arising from the sale of flat number 1802 was accepted as long-term capital gain. While computing the capital gain the assessee has taken indexed cost of acquisition at Rs. 7,619,860/- however the computation made by the learned assessing officer of the indexed cost of acquisition was arrived at Rs. 6,850,486/- . Up to this stage of computation there has been no dispute in these appeals. Thus, the reason for which case of assesses....
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....challenge before us. 013. The only dispute in this appeal is that from capital gain arising on sale of flat number 1802 as per agreement dated 10/2/2011, the assessee is eligible for deduction under section 54 of the act for purchase of new residential flat where the date of agreement to sale of the new property is 25 July 2009 but date of granting of possession is 02/2/2011. 014. The claim of the assessing officer is that the date of purchase of the new property is 25 July 2009. The window available for the assessee being one year prior the date of sale of the property i.e., 10/2/2011. As the assessee purchased the property on 25 July 2009 the assessee cannot be given a deduction under section 54 of the act. 015. The claim of the assessee is that assessee got possession of the property on 2/2/2011 therefore, the date of purchase of the property should be considered the date of possession of the property on 2/2/2011 which falls within one year prior to the date of 10/2/2011 and therefore the assessee is eligible for deduction under section 54 of the act. 016. The learned authorized representative submitted by way of a 21 page written submission, 115 pages paper book and relied ....
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...., and being a residential house50, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of 51[one year before or two years after the date on which the transfer took place purchased52], or has within a period of three years after that date 53[constructed, one residential house in India], 52then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain 54[is greater than the cost of 55[the residential house] so purchased or constructed (hereafter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii....
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....r the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall 60a[, subject to the third proviso to sub-section (1)] be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. Following second proviso shall be inserted after the existing proviso to sub-section (2) of section 54 by the Finance Act, 2023, w.e.f. 1-4-2024 : Provided further that the capital gains in excess of ten crore rupees shall not be taken into account for the purposes of this sub-section. 020. According to section 54 deduction is allowable if assessee purchases the property. In this case by agreement dated 2....