Case Law Details
K.S. Hanumantha Rao Vs PCIT (ITAT Bangalore)
According to the CIT, the assessee was not entitled to claim for deduction u/s 54 of the I.T.Act amounting to Rs.48,81,963 for the investment made in new asset, since the investment in the new asset was made one year prior to the date of sale of the original asset. T
As mentioned in CIT’s order (para 5), the window of purchase of new asset available to the assessee and his wife is from 24.05.2011 to 24.05.2014. The CIT considered the absolute sale deed dated 06.04.2011 as the date of purchase of new assets. Therefore, according to the CIT, the purchase of new asset was one year prior to the date of sale of the original asset (sale of original asset was on 24.05.2012) and hence was not entitled to deduction u/s 54 of the I.T.Act. The assessee had submitted a confirmation of builder of the new asset (flat) stating that at the time of registration of sale deed, the apartment was not completed and after finishing all the work in apartment, the same was handed over possession to the assessee only in the month of November 2011. A copy of letter of the builder is placed at page 94 of the paper book. A copy of the invitation extended on the occasion of gruhapravesham of new flat which was performed on 12.03.2012 is also placed on record at page 95 of the paper book. It is the contention of the assessee that the registration process was completed earlier because it was expected that there would be increase in stamp duty rates. This contention of the assessee cannot be brushed aside as untrue. In many cases, before the completion of flat the property would be registered on anticipation that there would increase in stamp duty rates. Be it as it may, I notice that the builder has certified that the new flat was handed over to the assessee only in the month of November 2011. This fact is also acknowledged by the CIT in the impugned order at para 5.2, wherein he states that – “5.2. ………….. From the submission and evidence produced, it is seen that though the newly acquired flat gets completed and comes into existence in November 2011 and gets physically handed over to the assessee in the same month………………… ” . Admittedly, the assessee is handed over possession of new flat in the month of November 2011 and gruhapravesham was completed on 12.03.2012. Since the assessee was handed over the possession of the new flat only in November 2011, that date should be considered for all practical purposes, the date of acquisition of new flat for claiming deduction u/s 54 of the I.T.Act. As mentioned earlier, window of purchase of new asset is available to the assessee from 24.05.2011 to 24.05.2014. Therefore, handing over possession of new asset being in the month of November 2011 falls within the period of window mentioned above. Hence, I hold that the assessee is entitled to deduction u/s 54 of the I.T.Act on purchase of new asset. It is ordered accordingly.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal at the instance of the assessee is directed against CIT’s order dated 19.01.2021 passed u/s 263 of the I.T.Act. The relevant assessment year is 2013-2014.
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