TaxTMI 
TaxTMI 
2024 (10) TMI 345
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....neous insofar as it relates to the denial of exemption u/s 54F of the act 2 2) The Ld. A.O erred in denial of exemption of Rs, 44.72.000/- u/s 54F of the act without appreciating the beneficial nature of the provisions of section 54F and the intent of legislature for introduction of an exemption 3 3) The Ld. AO ought to have appreciated the fact that the assessee entered into a Joint Development Agreement ("JDA") on 31^st May 2016 pursuant to which she was to receive a residential villa in exchange of her plot of land, the construction was to completed with in a period of 30 months based on which covenant the assessee has claimed exemption w/s 54F 4 4) The Ld. AO ought to have appreciated that when the JDA is the instrument of transfer of capital asset and accrual of Capital Gains, the same JDA 15 also an instrument of creation of Title of new asset eligible for claiming exemption w/s 54F of the Act. 5 5) The Ld. AO ought to have appreciated that when taxation of JDA is on the basis of deemed consideration accruing to the assessee, it is the same consideration which is already invested in the new asset as no monetary consideration has flown to the assessee. ....
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....ng Officer and accepted the deemed sale consideration at Rs.50,00,000/- and claimed indexed cost of acquisition of Rs.5,28,000/- and submitted that the assessee is eligible for claiming exemption u/s 54F of Income Tax Act, 1961. 5. However, the explanation of assessee was not acceptable to the Assessing Officer on the ground that the assessee was yet to receive the Villa/residential house and has not acquired legal title on such residential house/villa as on the date of JDA. Further, the assessee has not got legal title/registered the residential house/villa in her name till date while the section 54F stipulates that the assessee shall purchase house within two years or construct new house within three years. So, it is a violation of the section 54F of the Income Tax Act, 1961. The assessee herself admitted that the construction of villa was not completed till date and occupancy certificate was also not received. The Assessing Officer rejected the explanation offered by the assessee and completed the assessment u/s 147 r.w.s. 144C(13) of the I.T. Act and initiated penalty proceedings u/s 270A of the I.T. Act, 1961. 6. The learned Counsel for the assessee drew the attention of....
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....taken. 2. The Board has considered the matter and has decided that if the terms of the schemes of allotment and construction of flats/houses by the co-operative societies or other institutions are similar to those mentioned in para 2 of Board's Circular No. 471, dated 15-10-1986 (51. No. 428), such cases may also be treated as cases of construction for the purposes of sections 54 and 541 of the Income-tax Act. Further, as mentioned in the aforesaid circular, para 2 of Board s Circular No. 471, dated 15- 10-1986. 15 as under: 428. Capital gains from long-term capital asset - Investment in a flat under the self- financing scheme of the Delhi Development Authority - Whether to be treated as construction for the purposes of capital gains ....... 2. The Board had occasion to examine as to whether the acquisition of a flat by an allottee under the Self-Financing Scheme (SES) of the D.D.A. amounts to purchase or is construction by the D.D.A. on behalf of the allottee. Under the SFS of the D.D.A., the allotment letter is issued on payment of the first instalment of the cost of construction. The allotment is final unless it is cancelled or th....
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....t is a violation of the section 54F of the Income Tax Act, 1961. B) The assessee himself admitted that the construction of villa was not completed till date and occupancy certificate was also not received. The relevant portion of reply of assessee 15 reproduced 85 under:- While it is a fact that the construction of Villa has not been completed till date and occupancy certificate not received, it 15 also a fact that delay in construction is for reasons which are beyond my control. Initially the project could not be completed as there was 8 disagreement between the partners of the developer and thereafter delayed due to the Covid Pandemic. Also, I would like to impress upon the fact that I have not any consideration in monetary terms on entering the JDA or at any point of time after that. I am to receive only the residential Villa in lieu of the land. Hence, the assessee has not satisfied the conditions stipulated in section 54F of the Act. C) Further, the case laws/judgements referred by the assessee are not applicable to the assessee's case 85 the facts of the case are distinguishable. In view of above reasons, the claim of assessee 15 reject....