ACIT Vs. Sh. Vineet Kumar Kapila (ITAT Delhi)
ITAT held that booking of flat with the builder has to be treated as construction of flat by the assessee and hence period of three years would apply for construction of new house from the date of transfer of long term capital asset. Therefore, the Ld. CIT(A) has rightly allowed the exemption u/s. 54 of the Act, because in the present case also the flat booked with the builder by the assesse has to be considered as a case of construction of flat and the deduction claimed by the assessee u/s. 54 of the Act was rightly allowed, which does not need any interference on our part, hence, we uphold the same and reject the grounds raised by the Revenue.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal by the Revenue is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-21, New Delhi dated 16.10.2015 pertaining to assessment year 20 12-13 on the following grounds:-
1. Whether, the Ld. CIT(A), on the facts and circumstances of the case and also in law, has erred in deleting the addition of Rs. 1,44,14,836/- made by the AO on account of Long Term Capital Gain.
2. The appellant craves leave to add, amend, alter vary andy / or withdraw any or all the above grounds of appeal.
2. The brief facts of the case are that the assessee case was selected for scrutiny through CASS and notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred as the Act) was issued and served upon the assessee requiring him to furnish necessary details and documents along with supporting evidence. In response the assessee attended himself and submitted necessary details and documents in support of his return-of income. On 11/11/2011 the assessee sold a property Fiat No. 1101, Block: No.5, Uni world Garden, Sec-47, Gurgaon, ‘Haryana, resulting in Long Term Capital Gain amounting to Rs. 1,44,14,836/- against which the assessee has claimed deduction under Chapter 54 to the extent of Rs. 1,44,14,836/-. During the assessment proceedings the AO also noticed that the assessee has entered into an ‘Apartment Buyer Agreement’ with M/s Standard Farms Pvt. Ltd. and Tata Housing Development Co. Ltd. on 27/0812010. In this regard on consideration of facts and submission of the assessee, the AO was of the view that the impugned acquisition of new property by the assessee through ‘Apartment Buyer Agreement’, amounted to “purchase” of new house and that as per the provisions of section 54 of the Act the purchase should have been made before one year of the sale of Long Term Capital Asset or within two years of the sale. According to the AO, the impugned purchase of new house was not made within the period of one year before the sale of asset against which claim u/s. 54 of the Act has been made by the assessee. Accordingly, the deduction u/s. 54 of the Act was disallowed and assessment was completed at total income of Rs. 1,44,14,836/-. Aggrieved with the assessment order, the assessee appealed before the Ld. CIT(A), who vide his impugned order 16.10.2015 has allowed the deduction u/s. 54 of the Act and allowed the appeal of the assessee.
3. Aggrieved with the impugned order, the Revenue is in appeal before the Tribunal.
4. At the time of hearing, Ld. DR relied upon the order passed by the AO and reiterated the contentions raised by the Revenue in the grounds of appeal.
5. On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and reiterated the contentions made before the CIT(A). He further stated that since the Ld. CIT(A) has passed a well reasoned order, the same does not need any interference. Hence, he requested that the appeal of the Revenue may be dismissed.
6. We have heard both the parties and perused the relevant records available with us, especially the orders of the revenue authorities. We find that Ld. CIT(A) has discussed the issue in dispute elaborately at page no. 8 to 11 vide para nos. 4 & 5 of the impugned order. For the sake of convenience, we are reproducing herewith the relevant findings of the Ld. CIT(A) as under:-
“4. OBSERVATIONS:
I have carefully considered the written submission of the appellant and also the contents of the assessment order and perused the relevant material available on record. After having carefully considered the entire facts and circumstances of the case, my conclusions on the issue raised in the grounds of appeal are as under:-
As discussed above in the introductory paragraph of this appeal order, the assessee sold his property at Gurgaon on 11/11/2011 for total sale consideration of RS.2.47 crores showing LTCG of RS.1,44,14,836/- against which assessee claimed exemption uls 54 by investing LTCG to another property being developed by Standard Farms Pvt. Ltd. and Tata Housing Co. Ltd. In this regard, the details of transactions are given as below:-
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