TaxTMI 
TaxTMI 
2026 (9) TMI 771
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....reinafter referred as "the Act"]. 2. The brief facts of the case are that the assessee did not furnish her return of income for A.Y. 2011-12. The case of the assessee was reopened on the basis of information received by the AO that the assessee had sold an immovable property during the year for a consideration of Rs. 41,62,511/- and the capital gain arising thereon was not offered to tax. Accordingly, a notice u/s. 148 of the Act was issued on 27.03.2018, in response to which the assessee had filed her return of income on 07.12.2018 declaring total income of Rs. 3,84,770/-. As per the working of capital gain filed by the assessee, LTCG of Rs. 24,67,589/- was derived and the assessee had claimed exemption u/s. 54 of the Act to that extent....
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..... 147 of the Act. On merits, the Ld. AR submitted that the sale proceeds of the immovable property was invested in construction of two adjacent flats. He explained that the assessee had entered into a construction agreement with Tirupati Developers on 24.06.2010 for the construction of the two flats and as per the agreement assessee was required to pay Rs. 10,00,000/- each towards construction cost. Thereafter, the constructed flats were purchased vide sale deeds dated 20.03.2012 and further amount of Rs. 4,99,000/- for each of the flats was paid by the assessee. Thus, the total investment made by the assessee towards acquisition of two new flats was Rs. 29,98,000/-, whereas the deduction u/s. 54 of the Act by the assessee was to the extent....
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....ed in the construction agreement. Further, the sale deed effected on 20.03.2012 also did not refer to the construction agreement and the payment made earlier towards cost of construction was not appearing in the sale deeds. As per the sale deeds, the two flats were purchased for a consideration of Rs. 4,99,000/- each and thus the total investment in the two flats was to the extent of Rs. 9,98,000/- only. The Ld. SR-DR further pointed out that as per the sale deed the construction of the flats were not complete and the assessee had purchased unfinished flats which could not have been utilized for the purpose of residence. Regarding the payment to Dev Infra, the sister concern of Tirupati Developers, the Ld. SR-DR pointed out that the payment....
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.... assessee was eligible for claiming deduction u/s. 54 of the Act. According to the assessee, it had entered into construction agreements on 24.06.2010 (prior to the sale of the original property on 31.08.2010) for construction of two flats. A copy of the construction agreement has been brought on record in the paper book filed by the assessee. It is noticed therefrom that the cost of construction was fixed for Rs. 10,00,000/- for each of the flats which was required to be paid in instalments within 12 months from the date of agreement. However, the exact date and quantum of each instalment is not found mentioned in the construction agreement. The assessee has not produced any evidence for payment of construction cost to M/s. Tirupati Develo....