TaxTMI 
TaxTMI 
2025 (3) TMI 1760
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the assessee along with her mother and sister sold inherited immovable property situated near to Panvel city on 24.02.2011 for a consideration of Rs. 1,58,00,000/-. Assessee furnished computation of capital gain in the return of income claiming exemption of Rs. 9,27,468/- u/s.54 of the Act. In the course of the assessment, ld. AO asked the assessee to produce supporting evidences in respect of cost of improvement for the years 1985, 1995 and 2007. The assessee submitted the details of cost of acquisition however expressed inability to produce purchase bills, expense vouchers, payment proof for improvement. The assessee also could not complete full construction of residential house claiming benefit u/s.54 of the Act. Ld. AO made reference to the Valuation Officer but report not received. In the event of assessment getting time barred, ld. AO worked out the Capital Gain at Rs. 41,98,389/- denying the exemption claimed by the assessee u/s.54 of the Act, assessed income at Rs. 46,58,090/- as against Rs. 4,59,700/- declared by the assessee. 3. Aggrieved assessee preferred appeal before the ld.CIT(A) challenging the assessment order. The ld.CIT(A) partly allowed the appeal by hold....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng on before the court and the part of the construction has been completed, no final completion certificate were received from the local authority. Considering the fact that the assessee had not fulfilled conditions laid down in Sec 54 of the IT Act, deduction claimed by the assessee of Rs. 9,27,468/- was not found to be correct by the AO and accordingly, deduction claim u/s 54 was withdrawn. I have gone into the facts of the case. The AO has denied the claim u/s.54 as the appellant has not fulfilled conditions laid down in Sec 54 of the IT act. In view of the above facts, I am of the view that the AO has rightly disallowed the claim u/s 54 of the Act as the appellant has not fulfilled the conditions laid down under the said section. Accordingly, the action of the AO is upheld and ground of appeal is dismissed." 4. Now the assessee is in appeal before the Tribunal. 5. Ld. Counsel for the assessee referring to paper book submitted that the assessee has given all the requisite details viz. expenses, invoices of various expenditure, sathe karar, purchase deed, balance sheet, profit and loss account etc., before the authorities and therefore the cost of improvement for t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefore, keeping the matter in abeyance will unnecessary prolong the litigation. I therefore considering the DVO report hold that the indexed cost of improvement is Rs. 14,33,340/- and this is to be allowed as deduction against the sale consideration. Thus, Ground Nos. 1 and 2 raised by the assessee are partly allowed. 8. Now I take up Ground No.3 regarding the assessee's claim of deduction u/s.54 of the Act. In the computation of income, assessee has claimed that the sale consideration received from sale of property in question has been applied by it for purchase of a residential house within the specified time limit provided u/s.54 of the Act and accordingly claimed deduction of the net capital gain of Rs. 9,27,468/-. However, now since the claim of indexed cost of improvement has been reduced, the net capital gain prior to claim of deduction u/s.54 of the Act comes to Rs. 27,65,049/-. The assessee's claim u/s.54 of the Act was denied by the lower authorities on the ground that there were some litigations going on for the residential house purchased by the assessee and only part of the construction has been completed and no final completion certificate was received from the l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ords "two residential houses in India" had been substituted; (b) any reference in this sub-section and sub-section (2) to "new asset" shall be construed as a reference to the two residential houses in India: Provided further that where during any assessment year, the assessee has exercised the option referred to in the first proviso, he shall not be subsequently entitled to exercise the option for the same or any other assessment year: [Provided also that where the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees shall not be taken into account for the purposes of this sub-section.]" 9. From perusal of the above sub-section (1) of section 54, the same provides that the assessee shall be eligible for deduction u/s.54 if the assessee has purchased a residential house one year before or two years after the date of which the transfer took place or has within a period of three years after that date constructed one residential house in India. There is no reference to any 'completion certificate' from the authority. What is required is that the sale consideration which is received from sale of capital asset being a residential....