Case Law Details
Abodh Borar Vs ITO (ITAT Delhi)
The only issue in the appeal is the denial of deduction claimed by the assessee under section 54 and 54F of the Act. It is an undisputed fact that, firstly, the assessee has earned capital gain and has invested the same in purchase of a residential plot; secondly, the assessee has made a total investment of Rs.63,03,005/- which is more than the exemption of Rs.52,90,424/- claimed by her; and lastly, the assessee made this investment within the prescribed period. This payment was made to the developer Omaxe Chandigarh Extension Developers Pvt. Ltd. Consequent to that, the developer issued allotment letter and also entered into an agreement dated 05.07.2011. As per the agreement the developer was supposed to hand over the possession of plot within 18 months from the date of allotment letter. However, the developer did not deliver the possession. Hence, the assessee could not complete the construction within the prescribed period of 3 years. This delay in construction was not attributable to the assessee. Thus, the AO and the CIT (A) have denied the exemption in view of the provision of section 54 and 54F of the Act. Further, the AO and the CIT (A) both have ignored the fact that the assessee has made a full payment to the developer and such payment was more than the amount of the deduction claimed by the assessee. Since, the delay was not on the part of the assessee but on the part of the developer and thus it was beyond the control of the assessee. In such circumstances, we are of the view that benefit of deduction cannot be denied to the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
The aforesaid appeal has been filed by the assessee against impugned order dated 21.07.2016, passed by Ld. CIT (Appeals), Faridabad for the quantum of assessment passed u/s 143(3) for the A.Y. 2013-14. In the grounds of appeal, following grounds have been raised:-
“1.On the facts & circumstances of the case, the order passed by the Learned CIT (A)is bad, both in the eye of law and on the facts.
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Whether depositing the Capital Gain amount with a Developer, within 3 years of the sale of residential plot, for construction of a flat, irrespective of its date of possession, is eligible for relaxation in Capital Gain Tax ? Is there any decision of IT Tribunal or Court, in this regard ?