TaxTMI 
TaxTMI 
2026 (8) TMI 1459
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.... and multiple opportunities (via notices u/s 143(2) and 142(1)) which the assessee neglected, and making the submission of new documents at the appellate stage an inadmissible afterthought. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction for investment in Flat No. 3101, despite the fact that the primary purchase agreement and registration were in the names of Mrs. Cherry Mehta and Mr. Harsh Amit Mehta, and not the appellant and thereby the Ld. CIT(A) failed to recognize that the legal ownership of the new asset must vest with the assessee to qualify for exemption, and a subsequent 'Supplementary Agreement' cannot be used to retrospectively shift ownership for the sole purpose of claiming tax benefits. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in granting deduction u/s 54 and 54F for what are legally two distinct residential units and thereby the Ld. CIT(A) failed to appreciate the proviso to Section 54(1) (applicable from AY 2021-22), which restricts the claim for two houses only to cases where the Capital Gain does not exceed Rs. 2.00 Crores and as the ....
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....ecorded that the assessee furnished only copy of the Supplementary Agreement between the developer K. Raheja Private Ltd., and the assessee showing amalgamation of the properties. On perusal of such Supplementary Agreement, the AO recorded that the assessee purchased a flat with her wife (Cherry Mehta) had purchased 4 BHK Apartment, bearing flat No. 3101, admeasuring 2964 Square feet for consideration of Rs. 17.84 Crores. In the Supplementary Agreement, it was shown that the entire amount was paid by Smt. Cherry Mehta and her son (Harsh Amit Mehta). From Part B of the said agreement, it was noted that Amit M. Mehta (Assessee) and Mr. Harsh Amit Mehta (Son) purchased the flat no. 3102 admeasuring 2964 Square feet in the same building for consideration of Rs. 22.56 Crores. As per the agreement, the whole amount was paid by the assessee. 4. On the basis of details furnished by the assessee, the AO was of the view that the assessee is eligible for deduction in respect of one property purchased by him for Rs. 22.56 Crores and such benefit of Section 54 is available in respect of one flat. The AO by referring the provision of Section 54 of Income Tax Act, noted that on sale of propert....
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....uch claim as the second property was purchased in the name of Cherry Mehta and her son and thus, the assessee is not eligible for deduction/exemption under Section 54F. The copy of the remand report was forwarded to the assessee for his comment. The assessee filed his comment in response to the remand report of the AO. The assessee in his objection, stated that the AO has not provided any specific comment in his explanation. 8. The Ld.CIT(A), after considering the assessment order and submissions of the assessee and the provisions of Rule 46A, recorded that the assessee furnished his explanation in support of the claim of the exemption under Section 54 and 54F. The assessee furnished Supplementary Agreement along with his letter. From the material placed before him, the ld CIT(A) recorded that material details of both the flats were given in the Supplementary Agreement. The Ld.CIT(A) by referring the decision of the Bombay High Court in the case of Smt. Prabhavati Shah (1998) 231 ITR 1 wherein it was held that, if the prima facie evidence is necessary to examine the claim of the assessee, the CIT(A) should accepted the necessary evidence in exercise of his powers under Section 2....
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....Out of total payment of Rs. 17.84 Crore Rs. 5.44 Crore (Rs. 2.72 crore on 02.04.2021 and Rs. 2.72 Crore on 08.04.2921) was transferred by assessee in his wife account and from her account payment were made to builder. The assessee also paid Rs. 1.15 Crore in respect of Flat No. 3101 from his bank account. Thus, the assessee made investment of Rs. 6.59 Crore in flat No. 3101 and remaining of Rs. 11.60 Crore by his wife. On the basis of payment pattern the ld CIT(A) noted that in the composite flat the share of assessee and his wife is 71.83% and 28.17% respectively. Till the date of filing return of income for the impugned assessment year the assessee made total investment of Rs. 28.45 Crore in the composite flat. The ld CIT(A) also scanned the relevant clause of supplementary agreement dated 25.03.2022 with builder, wherein the share of assessee and his wife is mentioned as 70% and 30% respectively. The ld CIT(A) specifically recorded that supplementary agreement dated 25.03.2022 is duly registered with Sub-registrar concerned. On the basis of such observation the ld CIT(A) accepted that the two flats were purchased as a composite flat from builder. The ld CIT(A) by referring the d....
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....ssee, whereas in the present case, the clear bifurcation of payments and title between the appellant and his family members at the time of initial acquisition was of two flats. The ld SR DR for the revenue prayed to reverse the finding of ld CIT(A) and to restore the finding of AO. In alternative, the ld Sr DR for the revenue prayed to restore the matter back to the file of AO to consider the additional evidence afresh. 12. On the other hand, the ld AR of the assessee supported the order of ld CIT(A). Against the ground no. 1 which relates to violation of Rule 46A, the ld AR of the assessee submits that there is no violation of Rule 46A. The evidence in the form of supplementary agreement which was filed again before ld CIT(A), was available before AO. Thus, factually it was not in the nature of additional evidence. Otherwise, the ld CIT(A) admitted evidence after following due process of law. The AO was allowed opportunity to file his remand report. Admittedly, remand report was filed by AO before ld CIT(A). The ld CIT(A) while admitting additional facts and evidence clearly held that the evidences which are vital and crucial for adjudication of issue. The reasoning of ld CIT(A....
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....t the AO made disallowance of deduction under section 54 and 54F by holding that the assessee is eligible for deduction in respect of one property purchased by him for Rs. 22.56 Crores and such benefit of Section 54 is available in respect of one flat. We find that the AO by referring the provision of Section 54 of Income Tax Act, noted that on sale of property at Malabar Hill, the assessee earned long term capital gain of Rs. 26.59 Crores out of which the assessee has invested Rs. 22.57 Crores, he thereby, disallowed remaining amount of Rs. 4.03 Crores and brought to tax under long term capital gain. The AO held assessee earned long term capital gain on sale of shares. The assessee claimed deduction under section 54F against purchase a property being Flat No. 3101 from Raheja Developers of Rs. 1.86 Crores. The flat No. 3101 is in the name of his wife and his son. Thereby, the AO disallowed deduction of long-term capital gain of Rs. 1.86 Crores. We find that before AO as well as before ld CIT(A) the assessee strongly relied on the supplementary registered agreement wherein the assessee and the builder agreed to convert two adjacent flat in to a composite flat and ultimately flat No....