| Question And Answer | |
|---|---|
| Subject: | Sec.54F |
| Category: | Income-Tax |
| Querist: | Ruchi Bhansali |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Long term capital gains, Reassessment |
| Date: | July 2, 2022 |
Assessee is an individual and partner in partnership firm engaged in the business of advertising. In the A.Y. 2008-09. Assessee has capital long term gain other than land and building amounting to Rs. 3.25 cr.
Assessee has invested the entire amount for purchase of bungalow along with the land . The area of constructed bungalow is about 20000 sq.ft and area of land on which bungalow constructed is 60000 sq.ft
Assessee has executed registered the Development Agreement and power of attorney by paying full stamp duty and also taken the possession of the said property.
The assessee has not carried out any Development on said property and after holding for period of 42 months sold the said property as it is and offered the LTCL in A.Y. 2012-13, which is accepted U/sec. 143(1)(a) of the Act.
The issue is which assessee has invested the said amount for purchase of house U/Sec.54F he has paid the entire consideration for purchase of bungalow and land appurtenant there to. However instead of executing the Purchase deed he has executed the Development Agreement.
AO as well as CIT A has denied the claim only on the ground that since assessee has executed the development agreement, he not entitled for exemption U/SEc.54F. Even though department has accepted the LTCG on sale of same property after period of 3 years.
Assessee is before the ITAT on the following grounds
- Sec. 54 F speaks about purchase of residential house and investment of the amount with in stipulated time
- The property which is purchase is constructed bungalow along with the land appurtenant there to.
- Possession of the property is with the assessee.
- all other conditions of Sec.54F have been duly compiled
- Only because the assessee has development agreement insteade of sale deed does not disentitled the assessee from claim U/Sec.54F
- assessee has not carried out any development on the said property
- assessee has sold the property as it is after 42 months and offer the LTCG in the relevant year and same has been accepted U/SEc.143(1)(a)
- can assessee take any other argument or is there any judicial decision to support the case of the assessee. pl guide
The nomenclature of the deed cannot be the basis of deciding the taxability of a transaction. The terms of the deed would have to be understood. It would have to be demonstrated from the terms & conditions that the deed amounts to a Sale deed.