Reeva Sood Vs ACIT (ITAT Delhi)
ITAT find that the assessee has claimed exemption u/s 54 on account of long term capital gain on account of sale of house property which was invested in the purchase of another property one year ago, that is, the purchase deed was executed on 13.01.2012. The AO had allowed this claim vide in scrutiny assessment vide order passed u/s 143(3). Once the claim has been allowed in scrutiny proceedings, then the AO cannot withdraw the claim u/s 154, by mere change of opinion and without there being any apparent mistake on record. It is well settled proposition that AO cannot review his own order within the limitation and scope of section 154. In any case, there is no mistake apparent on record for the reason that; firstly, the formalities of sale and receiving of the entire sale amount was completed including handing of the possession was duly completed within the period of one year, that is, by the month of November 2012; and only due to some exceptional and unavoidable circumstances, there was a delay in registration which, here in this case. Secondly, it is undisputed fact that assessee has purchased the residential property on 13.01.2012 and assessee can claim exemption u/ 54 if she sale property within one year. Now, if assessee has received the entire sale consideration before one year and handed over the possession, then affectively assessee has transferred the property. If for extreme and unavoidable circumstances there is slight delay in registering the property exemption cannot be denied. Here the delay is only 11 days. Thus, no adverse inference can be drawn to withdraw the exemption. Accordingly, we hold that the exemption allowed by the AO in the original assessment order u/s 143(3) was correct and assessee’s appeal is allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
Aforesaid appeal has been filed by the assessee against the impugned order dated 05.03.2018, passed by the ld. CIT(A)-1 1, New Delhi in relation to the proceedings under section 154/143(3) of the Income-tax Act, 1961 (for short ‘the Act’) for the assessment year 2013- 14.
2. The assessee has filed revised grounds of appeal stating that firstly, ld. CIT (A) has erred in upholding the order of Assessing Officer passed u/s 154 as AO did not have any jurisdiction to rectify the order u/s
143(3); and secondly, ld. CIT (A) erred in confirming the disallowance of exemption claimed by the assessee u/s 54 of the Act.
3. The facts in brief are that the assessee has filed her return of income showing total income of Rs.24,70,668/-. In the return of income, the assessee has claimed exemption u/s 54 in respect of long term capital gain arising out of sale of a property and purchase of new house property. Assessing is joint owner of a property at A-1/ 112, Safdar jung Enclave along her husband. The property was divided into two portions, the assessee was the 100% owner of the Southern portion of this property and this portion was sold by the assessee for Rs.79 lakhs and the sale deed was executed on 23.07.2012. The Northern portion of the property was held by the assessee along with her husband and both were having 50% share. The assessee has sold her share of this property (Northern portion) for Rs.57,44,628/-and the sale deed was registered on 24.01.2013. The assessee has shown long term capital gains of Rs.45,06,829/- on sale of Southern portion of the property and of Rs.36,74,449/- on sale of the Northern portion of the property. The assessee has also claimed exemption u/s 54 of the Act in respect of the long term capital gains arising from sale of both these portions of the property by stating that the assessee has invested a sum of Rs.2, 13,20,000/- in purchase of second floor of the property at B7/11 1B, Safdarjung Enclave, New Delhi, for which the purchase deed was executed on 13.01.2012. Assessing Officer, after considering the claim made by assessee, had allowed the claim of exemption u/s 54 vide order passed u/s 143(3) dated 02.02.2016. Thereafter, AO had passed assessment order u/s 154 rectifying the said assessment order and denied the exemption u/s 54 after noting the following facts and disallowed the claim of exemption in the following manner :-
“Excess claim of exemption u/s 54 by the assessee to the tune of Rs.36,74,449/-
