TaxTMI 
TaxTMI 
2026 (3) TMI 676
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....nged, firstly, the addition of Rs. 13,47,925/- made by invoking the provisions of section 50C of the Act and, secondly, the disallowance of exemption claimed under section 54F amounting to Rs. 1,12,30,723/-. 3. At the outset, it is noted that the ground relating to short-term capital gain of Rs. 19,06,317/- was expressly not pressed by the learned counsel for the assessee at the time of hearing. The same is accordingly dismissed as not pressed. 4. The material facts relating to the addition of Rs. 13,47,925/- are that the assessee had sold a plot of land situated at Kaman, Vasai, for a total consideration of Rs. 1,19,79,240/-. The deed of conveyance in respect of the said plot was registered on 08.07.2013. For the purposes of stamp duty, however, the stamp valuation authority had initially adopted the market value of the said plot of land at Rs. 1,88,21,500/-. 5. The assessee's share in the said plot of land was 19.70%. Accordingly, the assessee considered his proportionate sale consideration at Rs. 23,59,770/- and offered the same to tax in the return of income. The Assessing Officer, however, noticing the difference between the declared consideration and the stamp duty v....
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....revised stamp duty valuation, nor did the learned CIT(A) render any reasoned or cogent finding on this crucial aspect while sustaining the addition. 10. At this stage, it becomes necessary to examine the applicability of the deeming fiction contained in section 50C in the backdrop of the aforesaid undisputed facts. Section 50C is a special deeming provision which permits substitution of the declared consideration with the stamp duty value only where such stamp duty value represents the fair market value of the capital asset transferred. The provision does not operate in vacuum, nor does it authorise adoption of a value which is demonstrably erroneous or factually incorrect. In the present case, the stamp valuation authority itself has categorically acknowledged that the original valuation was vitiated by a fundamental factual error, namely, the inclusion of a substantial area of an approach road which neither formed part of the plot conveyed nor was transferred to the purchasers under the deed of conveyance. 11. Once the competent stamp valuation authority, upon verification of facts, has itself rectified the error by executing a Supplementary / Clarification Deed and has con....
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....by the assessee under a registered agreement dated 29.03.2011. The Assessing Officer disallowed the exemption on the reasoning that the new house was acquired by the assessee beyond the period prescribed under section 54F, since the agreement for purchase of the new house was dated 29.03.2011, which was more than one year prior to the date of transfer of the original asset, i.e., 02.09.2013. The learned CIT(A) confirmed the disallowance, firstly, on the premise that for the purposes of section 54F, it is the agreement/registration which is decisive and not the date of possession, and secondly, upholding the Assessing Officer's further observation that the assessee owned another residential property on 02.09.2013 and therefore, according to the authorities below, the assessee owned more than one residential house and was hit by the restrictive proviso to section 54F(1). 15. Before us, the learned counsel for the assessee reiterated the claim and, in a structured manner, placed on record the relevant factual matrix and legal submissions. It was submitted that the assessee had claimed exemption of Rs. 1,12,30,723/- under section 54F of the Act, but the lower authorities denied such....
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....out that though the registered agreement for sale was entered with the builder M/s. Hiranandani Constructions Pvt. Ltd. on 29.03.2011, the payments were made c, culminating in actual possession being handed over on 02.02.2015. The year-wise details of payments made to the builder towards purchase of the flat, as forming part of the record, are required to be noted. Sr.no. Particulars Date Appears in the paper book at pg nos. (i) Registered agreement for sale entered with the builder M/s. Hiranandani Constructions Pvt. Ltd. 29.03.2011 52 to 146 (ii) Year wise details of payments made to the builder towards the purchase of flat 48 to 50 (i) Ass. Yr. 2010-11 33,96,200/- (ii) Asst.yr. 2011-12 88,86,711/- (iii) Asst.yr. 2012-13 25,54,659/- (iv) Asst.yr. 2013-14 1,85,268/- (v) Asst.yr. 2014-15 28,01,540/- (vi) Asst.yr. 2015-16 25,40,617/- Total Rs. 2,03,64,995/- (iii) Possession of the flat received from the builder on 02.02.2015 51 19. The learned counsel submitted that the possession of the flat was received from the builder on 02.02.2015, and therefore, in substance and in law, the purc....
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....ow compass but requires a correct appreciation of the substance of the transaction and the settled legal meaning assigned by judicial precedent to the expressions "purchase" and "construction" in the context of section 54F, especially where the new residential house is an under-construction property acquired from a builder and the assessee makes staged payments culminating in possession. 23. The first objection of the Revenue is premised entirely on the date of the registered agreement, i.e., 29.03.2011, treating the same as the determinative date of "purchase", irrespective of the nature of the asset at that stage, irrespective of the payment structure, and irrespective of the date when the assessee, in reality and in substance, became entitled to occupy and enjoy a completed residential unit. Such an approach, in our considered opinion, is contrary to the well- settled principle that, for the purposes of beneficial provisions like section 54F, the law has consistently looked to the substance and completion of the transaction, namely, the stage when the assessee has substantially effected purchase by payment of consideration and has obtained possession of a ready residential ho....
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....herefore, treating 29.03.2011 as the rigid "purchase date" for section 54F, without considering the factual nature of the asset and the completion of the transaction, would be to elevate form over substance and to read the beneficial provision in a manner that has already been disapproved by binding precedent. 27. We also find that this principle has been consistently followed by the Tribunal in a catena of decisions, including the decisions cited by the learned counsel, which recognise that in cases of under-construction flats purchased from builders, the relevant considerations are the completion of construction, substantial payment, and receipt of possession within the stipulated period. We therefore hold, respectfully following the jurisdictional High Court and the consistent Tribunal view, that the assessee's claim cannot be denied merely because the initial agreement is dated beyond one year prior to the sale, when the possession and completion, which constitute the real and effective purchase in such cases, occurred within the permissible statutory period reckoned from 02.09.2013. Accordingly, the first ground on which exemption was denied fails. 28. We now come to the....