June 2019

Section 54F r.w.s. 45, 2(29B) and 2(42B) – Assessee having acquired rights in a flat vide allotment letter dated 26.02.2008 issued by the builder which was an unconditional allotment, and since the agreement to sell executed by the builder in assessee’s favour subsequently on 25.03.2010 was mere improvement in assessee’s existing rights to acquire a specific property, the gains arising on the sale of the said flat on 04.04.2012 were long term capital gains; assessee was entitled to exemption u/s. 54F

JAGDISH T. PUNJABI | DEVENDRA JAIN | TEJASWINI GHAG
Chartered Accountants

13
[2019] 199 TTJ (Mumbai) 388

ACIT vs. Keyur Hemant Shah

ITA No. 6710/Mum/2017

A.Y.:  2013-14

Dated: 2nd April, 2019

 

Section 54F r.w.s. 45, 2(29B) and 2(42B) – Assessee having acquired rights in a flat vide allotment letter dated 26.02.2008 issued by the builder which was an unconditional allotment, and since the agreement to sell executed by the builder in assessee’s favour subsequently on 25.03.2010 was mere improvement in assessee’s existing rights to acquire a specific property, the gains arising on the sale of the said flat on 04.04.2012 were long term capital gains; assessee was entitled to exemption u/s. 54F

 

FACTS

The assessee filed return of income on 31.07.2013 declaring income of Rs. 185.33 lakhs. During the assessment proceedings it was found by the A.O. that the assessee had sold a flat for a consideration of Rs. 1.20 crores in which he had a 50% share. The long term capital gain was computed at Rs. 288.73 lakhs out which Rs. 109.4 lakhs was claimed exempt u/s. 54F and the balance was offered to tax. It was observed by the A.O. that the agreement for purchase of the flat was executed on 25.03.2010 and was sold subsequently on 04.04.2012. Hence the period of holding for the original property was less than 36 months and hence the capital gains arising out of the same cannot be claimed for exemption u/s. 54F.

 

The assessee defended the claim by submitting the letter of allotment of the flat dated 26.02.2008 and asserted that substantial payments for the flat were made by that time and therefore the period of holding exceeds the required period of 36 months to classify the flat as long term capital asset.

 

Aggrieved, the assessee preferred an appeal to the CIT(

--->

Past Issues

Flip-Book
HTML View
Current Issue