Prakash Pandharinath Bakre Vs PCIT (ITAT Jaipur)
Benefit under section 54 is available to an individual who has transferred a long term capital asset being a ‘residential House Property’ and the assessee has either purchased one residential house in India within a period of one year before or two years after the date of transfer of the original asset or constructed one residential house in India within a period of three years from the date of transfer of the original asset. In the instant case, the purchase of the new flat is evidenced by the purchase deed dated 10.03.2014 which is within a window of one year before the date of transfer of the house property on 24.11.2014 and it thus satisfies the requirement and mandate for claiming exemption under section 54 of the Act. What is relevant to determine is the date of purchase and such date of purchase is evidenced by the purchase deed reflecting the final payment and taking over the possession of the flat. Merely because the assessee has made payments in instalments and some of the instalments were paid prior to one year window before the date of sale of the original assets would not debar the assessee from claim of deduction under section 54 of the Act.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the assessee against the order of ld. Pr. CIT-1, Jaipur dated 23.03.2020 wherein the assessee has raised the following grounds of appeal.
“1. In the facts and circumstances of the case and in law, the ld. PCIT has erred in exercising the revisionary powers by passing the order u/s 263 of the Income Tax Act, 1961 setting aside the order passed u/s 143(3) dated 16.10.2017. The action of the ld. PCIT is illegal, unjustified, arbitrary and against the facts of the case. Relie f may please be granted by quashing the revision order of ld. PCIT u/s 263.
2. In the facts and circumstances of the case and in law, ld. PCIT has erred inobserving that the assessee was not eligible for deduction under section 54 of the Income Tax Act, 1961. The action of the ld. PCIT is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by holding the observation of ld. PCIT as illegal, contrary to facts available on record and beyond jurisdiction. Accordingly, the revision order of ld. PCIT passed u/s 263 may please be quashed. ”
2. At the outset, it is noted that there is a delay in filing the present appeal by 26 days. After hearing both the parties and considering the affidavit filed by the assessee, the delay is hereby condoned and the appeal is admitted for necessary adjudication.
3. During the course of hearing, the ld. AR submitted that the assessee filed his return of income on 30.08.2015 declaring total income of Rs.42,13,860. The case of assessee was selected for limited scrutiny. The assessment was then completed u/s 143(3) vide order dated 16.10.2017 wherein the returned income of the assessee was accepted. The case of the assessee was then taken up for revisionary proceedings u/s 263 by ld. PCIT. The present appeal is against the order u/s 263 of the Act.
4. The ld. AR submitted that the case of the assessee was selected for limited scrutiny and two issues relating to deduction claimed under the head “Capital Gains” and Tax Credit mismatch were identified for examination. It was submitted that the assessee claimed deduction u/s 54 by selling a house property and by making investment in another house property. The assessee, before ld. AO, duly placed on record the following documents vide reply to ld. AO dated 26.09.2016:
