ITAT allowed exemption u/s 54 (of Income Tax Act, 1961)
ITAT allowed exemption u/s 54 (of Income Tax Act, 1961)
Assessee sold a property and purchased a new flat from sale proceeds, and claimed capital gain as exempt u/s 54 (of Income Tax Act, 1961). AO noted that purchase was after two years from date of transfer of old property, and held assessee was not entitled to exemption. CIT(A) allowed exemption. ITAT held that since assessee had purchased a flat under construction within 3 years and since flat will be handed within 3 years, exemption must be allowed.-500647
1. A search u/s 132(1) (of Income Tax Act, 1961) was carried out at the business and residential premises of Nitco Group of Companies, and assessee was also covered under the search.
2. Notice u/s 153A (of Income Tax Act, 1961) was issued to the assessee.
3. Assessee filed return of income declaring total income of Rs 27,63,070.
4. Assessment u/s 153A (of Income Tax Act, 1961) r/.w.s. 143(3) was completed determining total income at Rs 1,71,25,500.
5. Assessee sold a property for Rs 1,70,00,000, and purchased a new flat from sale proceeds, and claimed capital gain of Rs 1,43,62,24, as exempt u/s 54 (of Income Tax Act, 1961).
6. AO noted that tassessee purchased a new flat after a period of two years from the date of transfer of the old property, and thus assessee was not entitled to claim exemption u/s 54 (of Income Tax Act, 1961).
7. AO disallowed the exemption u/s 54 (of Income Tax Act, 1961).
8. CIT(A) allowed relief to the assessee.
On appeal, the ITAT held as under:
9. Since assessee has purchased a flat under construction from the developer within a period of three years and also considering that the flat will be handed over within a period of three years the assessee will qualify as per the provisions for construction under section 54 (of Income Tax Act, 1961).
10. This reasoned factual findings of the CIT(A) does not require any interference from our side.
Case Reference - ACIT vs Shri Prannath Talwar.
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI
BEFORE SHRI SHAILENDRA KUMAR YADAV, JM
AND SHRI RAMIT KOCHAR, AM
ITA No. 885/Mum/2014
(Assessment Year: 2006-07)
×
