Vadagur Narayanappa Premachandrac Vs ACIT (ITAT Bangalore)
ITAT Bangalore held that the assesse is entitled to claim deduction u/s. 54 of the Act if the assesses able to establish the fact that the construction was commenced within the period prescribed of 3 years under the Income Tax Act.
Facts- The assesses along with the other co-owners had entered into a Joint Development Agreement (JDA) on 11/03/2021 with the builder M/s. Balaji Constructions and handed over the land to the extent of 1,35,461 ft. for the development and construction of flats.
The assesses had arrived the sale consideration as 5,97,02,408/- which was not accepted by the AO. AO took the area of land as 82,631 Sq.ft. and arrived the long term capital gains at Rs. 2,19,75,275/- as against the long term capital gains computed by the assesses at Rs. 1,55,72,725/-. AO also not accepted the claim of the assesses that the entire capital gains is eligible for exemption u/s. 54 of the Act for the reason that the new asset has been constructed after a period of 3 years from the date of transfer of the land under the JDA.
Conclusion- The ownership of the immovable property could not be transferred without executing any registered document. In the present case on hand there is no such documents were available to show that the assessee as well as his brother are the owners. In such circumstances we do not accept the reasoning given by the AO for arriving the share of the assessee at 50%. Further the assessee was also not able to explain why he has adopted a lesser area of land while computing the long term capital gains.
