Saturday, March 22, 2014

Sec. 54F relief can’t be denied if assessee merely pays booking amount one year prior to date of transfer

Mere booking of flat one year prior to date of transfer of asset did not vest assessee with ownership of new asset and it was only by virtue of registered sale deed executed within prescribed time period under section 54F assessee became owner of flat. Thus, assessee's claim for deduction under section 54F was to be allowed
Facts:
a)  The assessee received compensation on acquisition of his land by State Industrial Area Development Board (SIADB). The assessee had declared long term capital gains after claiming deduction under section 54F in respect of investment made in purchase of a flat.
b)  The Assessing Officer found that assessee had availed housing loan and booked said flat one year prior to date of receipt of compensation, and accordingly, he rejected assessee's claim for deduction. 
c) On appeal, the CIT (A) held against the assessee. The aggrieved-assessee filed the instant appeal.
The Tribunal held in favour of assessee as under:
1)  The authorities were not justified in holding that the investments were made one year prior to the date of receipt of compensation for the asset as the amounts paid by the assessee on booking of the asset had not vested the assessee with ownership of the new asset;
2)  The assessee had been vested with the ownership of the new flat only by virtue of the registered sale deed executed within prescribed time period under section 54F;

3)  Thus, the assessee's claim for deduction was to be allowed. The Assessing Officer was to be directed to allow the assessee’s claim of exemption under section 54F accordingly. - Gopilal Laddha v. ACIT [2014] 42 taxmann.com 390 (Bangalore - Trib.)