CIT v Kuldeep Singh (ITA No: 117/2014 dated 12th August, 2014) (Delhi High Court) Background: The assessee in his return had declared a taxable income of Rs.47,88,579/- after claiming benefit of Section 54 of the Act of Rs.37,86,273 on sale consideration of Rs.2 crores declared as income from capital gains on the sale of house property. The Assessing Officer referred to the copy of the flat buyers agreement dated 9th February, 2006 between the assessee and the builder and observed that the ownership in the new property would be conferred on the date of issuance of occupation certificate. Further, the expected date of completion was 36 months from the date of the agreement dated 9th February, 2006 i.e. 8th February, 2009. He held that the assessee was not entitled to benefit of Section 54 as he had not purchased the new property within a period of one year before the sale of first property on 3rd June, 2005 or within two years from the date on which the transfer took place. The assessee had not constructed residential house within three years from 3rd June, 2005.
S. 54
Gulshan Malik v CIT (IT APPEAL NO. 55 OF 2014 dated 14.03.2014) – Delhi High Court Background: The assessee and his wife had booked an apartment vide an application dated 31.07.2004, by payment of a booking amount of Rs. 2,00,000/-on 3.08.2004 and consequently, it is claimed, acquired rights or interests in the same. The builder DLF issued a letter dated 6.08.2004 provisionally allotting the apartment and two parking spaces. A buyer’s agreement was executed on 4.11.2004 between DLF and the allottees. Per the payment schedule, a total payment of Rs. 87,12,500/- was made from 31.07.2004 to 03.08.2006 towards the purchase of the apartment. Following this, the Assessee entered into an agreement to sell dated 2.11.2007 to sell their booking rights/rights or interest in the apartment. In the computation of income, the assessee declared a long term capital gain of Rs. 31,35,740/- on the sale of booking rights/extinguishment of rights in the apartment (period between acquisition and sale of the booking rights in the apartment was claimed to be 39 months and 2 days). An exemption was claimed under Section 54 of the Act, 1961 as the same was invested in purchase of another apartment in June 2008.
Dt of agreement and not the dt of confirmation letter to be considered for computing ...
ITO v SMT BINA GUPTA [ITA No.4074/Del/2012 (dtd 18/10/2013) (Delhi ITAT)] Background: Assessee sold house on 13.06.2008 on which long term capital gain was shown at Rs.31,00,369. Deduction u/s 54 was claimed for entire capital gain on a/c of investment in house. Assessee has also sold a plot at Sradhapuri, Meerut on 10.11.2008 on which Long Term Capital Gain is shown at Rs.19,89,914/-. Deduction u/s 54F has been claimed for this entire amount on a/c of investment in the same houseas mentioned above. The AO found that the assessee had advanced monies to the builder on agreement and deposited money in capital gains scheme. The AO held that since no house had been purchased till the date of assessment order as two years period had lapsed, deduction u/s 54 and 54F was to be disallowed.
Deduction u/s 54-54F allowed if delivery of house could not be obtained but entire payment ...
CIT v Gita Duggal ITA No. 1237/2011 (Del HC) dtd 21.02.2013 Background: Assessee was the owner of property in New Delhi comprising of the basement, ground floor, first floor and second floor. On 08.05.2006 she entered into a collaboration agreement with a developer for redeveloping the property. According to its terms, the assessee being desirous of getting the property redeveloped/reconstructed and not being possessed of sufficient finance and lacking in experience in construction, approached the builder to develop the property for and on behalf of the owner at the cost of the builder. The builder was to demolish the existing structure on the plot of land and develop, construct, and/or put up a building consisting of basement, ground floor, first floor, second floor and third floor with terrace at its own costs and expenses. In addition to the cost of construction incurred by the builder on development of the property, a further payment of Rs. four crores was payable to the assessee as consideration against the rights of the assessee. The builder was to get the third floor.