TaxTMI 
TaxTMI 
2024 (7) TMI 1274
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..... 90,00,000/- and shown 'Long Term Capital Gain' of Rs. 38,70,155/- and claimed deduction of Section 54F of Rs. 26,05,425/- towards purchase of new residential house. During the course of assessment proceedings, the appellant has made a fresh claim before the Assessing Officer for deduction under section 54F of the Act, of Rs. 55,04,261/-. 4.1 The AO has also observed that the circle rate of the property applicable was Rs. 29,000/- with effect from 01.09.2008, and the property was got registered after this date. The sale consideration is calculated by the Assessing Officer at Rs. 1,30,50,000/- against the declared sale consideration of Rs. 90,00,000/- by the appellant. 4.2 Then AO had asked the appellant to file the documentary evidence in support of the claim of deduction u/s 54F of Rs. 55,04,261/- against the claim made in the Return of Income of Rs. 26,05,425/-under section 54. In response, the appellant has produced a copy of allotment letter with payment plan of Rs. 54,40,770/- for the purchase of residential flat from J.P Associates Ltd., but till the date of filing of return claimed to have paid a sum of Rs. 20,53,350/- only. The AO has discussed that as per the pr....
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....is is not a mandatory provision as 'may' is used and not 'shall', for the powers of AO, to invoke this proviso. 6.1 It was further held that the appellant has only filed copy of 'Agreement to Sale' for the purchase of Gagan Vihar property which is claimed to have made on 28.10.2008. During the course of appellate proceedings, before the CIT(A), the appellant was asked to produce the Registered sale deed as evidence, to prove that actual transaction took place. CIT(A) mentions that the appellant had taken time on four occasions to furnish this from 2nd January, 2018 to 21st August, 2018 and finally the Ld. A.R. of the appellant has mentioned that no registered sale deed can be produced by the appellant. This fact has been recorded in the order sheet dated 21.08.2018. Hence, the plea of the appellant that this investment was made in the Gagan Vihar property was held, by CIT(A), to be not supported by any documentary evidence. CIT(A) held that as 'Agreement to Sale' has no evidentiary value after three months and even after a lapse of ten years i.e. from 2008 i.e. date of 'Agreement to Sale' till 2018 the appellant has failed to produce the copy of the Registered ....
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....igh Court in CIT, Chennai Vs. Shri Vummudi order dated 28/09/2020, in TCA No. 329 of 2020, as relied by ld. AR. The CIT(A) has also fallen in error to hold that application is prospective. 10. Now, vide ground no. 5, the assessee prays that AO disallowed the deduction u/s 54F of Rs. 38,25,410/- without bringing any material evidence in support of the disallowance. Now what comes up is that the assessee had claimed exemption u/s 54 of Rs. 26,05,426/- in the original return. The copy of which is on PB at pages 8-10. The assessee sold the residential plot, got registered on 16/10/2008 and had invested proceeds in the properties as follows: (1) Residential house, 2d Floor 159, Gagan Vihar, Delhi - 110092 for Rs. 75,00,000/- payment made on 29/10/2008, as such acquired before the due date of filing of return u/s 139 (1). (2) Entered into a contract for flat for Rs. 54,40,775/- against which payment of Rs. 20,53,350/- was made till the due date of filing of return u/s 139(1). 11. The assessee during the course of assessment proceedings, furnished a revised computation of income claiming exemption u/s 54F for the investment made in the residential house property for Rs. 75,00,000/- ....
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....emption is calculated in the following para." 14. Still, the benefit of section 54F was extended to the assessee only with regard to investment in property to the extent of Rs. 20,53,350/-. The CIT(A) had observed in para 6.4 that only an agreement to sell copy was filed with regard to purchase of Gagan Vihar property for Rs. 75 lacs and when the assessee was asked to produce registered sale deed as evidence, the assessee took time on four occasions and, ultimately, the authorized representative of the assessee has mentioned that no registered sale deed can be produced by the assessee. Thus, considering the investment in Gagan Vihar property to be not supported by any documentary evidence and holding that agreement to sell has no evidentiary value after three months and even after a lapse of ten years i.e., from 2018, the assessee is only entitled to investment made in new property to the extent of Rs. 20,53,350/- only and it was considered that as in original return deduction of only Rs. 26,05,425/- was made this claim of purchase of residential house in Gagan Vihar for Rs. 75 lacs is afterthought. 15. Now, before us again, the copy of agreement has been placed on record at page....
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.... the assessee has made investment of Rs. 1 Crore for purchase of residential house and only the registered deed was executed after more than 4 years and the possession was also taken after more than 4 years but as per the judgment of Hon'ble Karnataka High Court, the assessee will not disentitled from claiming deduction u/s. 54F of the IT Act. Respectfully following this judgment of Hon'ble Karnataka High Court, we hold that assessee should be allowed deduction u/s. 54F to the extent of Rs. 70,84,063/- as claimed by the assessee because investment in purchase of a new residential house made by the assessee is of Rs. 1 Crore and it was made by the assessee on 30.06.2012 whereas the transfer of the original asset took placed on 19.09.2011. There is no dispute on these factual aspects because the same are noted by the AO also in para 14 of the assessment order and there is no observation of the AO that these facts are not correct. Hence we hold that deduction claimed by the assessee u/s. 54F is allowable and we delete the disallowance. " (iii) Shri Basheer Noorullah Khan vs. The Commissioner of Income Tax (Appeals), Bangalore, ITA No. 575/Bang/2019 Assessment Year : 2013-14,....