The Tax PublishersITA No 783/Ahd/2016
2022 TaxPub(DT) 5854 (Ahd-Trib)INCOME TAX ACT, 1961
Section 54F
Delay in registration of the new property was for reasons beyond assessee's control. Therefore, denial of exemption under section 54F for a mere technical default in not getting the new property registered within the stipulated time period of two years could not be sustained.
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Capital gains - Exemption under section 54F - Delay in getting new property registered within stipulated period of two years due to reasons beyond assessee's control -
Assessee sold his property on 1-12-2011 and he was required to purchase a new residential house for claiming exemption under section 54F by 31-11-2013. The conveyance deed for purchase of new property was executed five months later, i.e., on 3-5-2014. Accordingly, AO denied exemption. Assessee pleaded that delay in registration of new property was for reasons beyond his control. Held: After depositing sale consideration in his capital gain account scheme in May 2012, by June, 2013 assessee had finalized property for purchase and entered into an agreement to purchase the same also, which transaction was finally executed on 3-5-2014. This established his true intention of investing in the new property all along. The Memorandum of Understanding for purchase of property clearly mentioned that occupants of the building in which a flat was purchased by assessee, had agreed to form and register a cooperative housing society which was still pending as on date of entering the Memorandum of Understanding. That it was only in December, 2014, that society was formed, and Vendor was allotted share certificates, thus making his title to the property clear. And immediately thereafter, within three months of formation of society, assessee got possession of his property and the entire consideration was also paid. These facts are not disputed by AO. Considering the above facts, there was no iota of doubt that delay in registration of the new property was for reasons beyond his control. Therefore, denial of exemption under section 54F for a mere technical default in not getting the new property registered within the stipulated time period of two years could not be sustained.
Distinguished on fact:Rasiklal M. Parikh v. Asstt. CIT (2017) 88 Taxmann.com 732 (Bom-HC) : 2017 TaxPub(DT) 1057 (Bom-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, AHMEDABAD BENCH
ANNAPURNA GUPTA, A.M. & SUCHITRA KAMBLE, J.M.
Vikas Narayan Baddi v. ACIT
ITA No. 783/AHD/2016
31 August, 2022
Assessee by: Manish Shah, Advocate & Jimi Patel, Authorized Representative
Revenue by: G.C. Daxini, Senior Departmental Representative
Annapurna Gupta, A.M.
Present appeal has been filed by the assessee against order passed by the learned Commissioner (Appeals)-11, Ahmedabad (here in after referred to as Ld. CIT (A)) under section 250(6) of the Income Tax Act, 1961 ('the Act' for short) dated 18-12-2015 pertaining to the assessment year 2012-13.
2. At the outset itself, it was stated that solitary issue involved in the present appeal related to denial of claim of exemption of long-term capital gain of Rs. 1,08,69,338 on account of investment of the same in a new residential house as per the provision of section 54F of the Act. It was stated that the claim of the assessee was denied by the Revenue by holding that the assessee had failed to comply with the conditions stated therein of making investment in new residential house within the stipulated period of two years from the date of sale of original asset. The assessee, on the other hand, has claimed that delay in investment was for reasons beyond his control and that too of a very short period of five months and intention of the assessee was to make investment of capital gain in new residential house, and therefore, it should be allowed the claim of the exemption under section 54F of the Act. The grounds raised before us, in this regard, are as under:
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