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| The Tax Publishers2020 TaxPub(DT) 3925 (Mum-Trib) INCOME TAX ACT, 1961
Section 54F
Where assessee acquired a flat from builder on basis of allotment letter issued by builder and thereafter, assessee sold said flat and claimed exemption under section 54, following judgment of Tribunal in Ashwin S. Bhalekar, CIT(A) erred in not accepting letter of allotment, ignoring fact that assessee acquired the right of ownership in the flat, which came into existence by virtue of allotment letter and also by the receipts of payments issued by builder.
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Capital gains - Deduction under section 54F - Property acquired by allotment letter whether to be construed as capital asset for purpose of exemption -
Assessee acquired a flat from builder on basis of allotment letter issued by builder and paid consideration against which builder issued receipts. Thereafter, assessee sold said flat and claimed exemption under section 54 on basis of fact that he invested total consideration to be paid as per agreement for sale in purchase of new flat. AO alleged that benefit received on cancellation of deal with builder was to be treated as income from other sources, instead of long term capital gains, as no purchase as well as sale agreement was entered into by assessee with the builder. Held: There was no infirmity in allotment letter once it was examined along with bank statement, ledger account and letter of cancellation. Similar issue arose before the Tribunal in Ashwin S. Bhalekar. Thus, CIT(A) erred in not accepting letter of allotment, ignoring fact that assessee acquired the right of ownership in the flat, which came into existence by virtue of allotment letter and also by the receipts of payments issued by builder.
Followed:Ashwin S. Bhalekar ((ITA No. 6822/Mum/2016) for assessment year 2012-13 : 2019 TaxPub(DT) 4124 (Mum-Trib))
REFERRED :
FAVOUR : Matter remanded
A.Y. : 2012-13
IN THE ITAT, MUMBAI BENCH
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