Popatbhai Dhanjibhai Patel, Ahmedabad V. The ITO, Ward-1(2)(5), Ahmedabad

ITA 1453/AHD/2017

AI Insights

The case revolves around the appeal by Popatbhai Dhanjibhai Patel against the order of the Commissioner of Income Tax (Appeals) which upheld the addition of Rs.65,39,434 as long-term capital gains for the assessment year 2013-14. The primary contention was regarding the computation of capital gains from the sale of a property, where the assessee argued that his share was 1/12th and not 1/9th as considered by the AO. Additionally, the assessee contested the stamp duty valuation and the denial of exemption under section 54F for reinvestment in a new property. The Tribunal found merit in the assessee's arguments regarding the share in the property and the exemption under section 54F, but rejected the claim for substituting the sale consideration with the jantri value as per the agreement to sell.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133612 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 22-02-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 13-06-2017
• Other Referred Cases: CIT Vs Smt. Shantha Kumari
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Cost of acquisition; Capital Gains
• Section: 50C; 54F

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘D’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No.1453/Ahd/2017 Assessment Year :2013-14 Popatbhai Dhanjibhai Patel B-11, Uma Bhavani Park Society Nr.Chandkheda Station Tragad Road, Tragad Ahmedabad. PAN : AHEPP 9746 K ITO, Ward-1(2)(5) Ahmedabad. (Applicant) (Responent) Assesseeby : Shri S.N. Divatia, AR Revenue by : Shri Atul Pandey, Sr.DR स ु नवाई क तार ख/Date of Hearing : 23/02/2023 घोषणा क तार ख /Date of Pronouncement: 24/02/2023 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the assessee against order passed by the ld. Commissioner of Income Tax (Appeals)-10, Ahmedabad[hereinafter referred to as “Ld.CIT(A) under section 250(6) of the Income Tax Act, 1961 ("the Act" for short) dated 7.3.2017 pertaining to the Asst.Year 2013-14. 2. The grounds raised by the assessee are as under: “1.1 The order passed u/s.250 on 7-3-2017 for A.Y.2013-14 by CIT(A)-10 , Abad upholding the addition of Rs.65,39,434/-as long term capital gains ITA No.1453/Ahd/2017 2 made by AO is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in confirming the impugned addition on the reasons not raised by AO as well as without considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned additions. The CIT(A) has grievously erred in law and on facts in confirming the impugned addition for the reasons not raised by AO so that it was exceeding his jurisdiction and illegal. 2.1 The Ld. CIT(A) has grievously erred in law and on facts in confirming addition of Rs.65,39,434/- as long term capital gains made by AO. The findings given by CIT(A) for upholding the impugned addition of Rs.65,39,434/-were presumption, surmises and contrary to law as well as evidence on record. 2.2 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld addition of Rs.65,39,434/- as long term capital gains made by AO. 2.3 The Ld. CIT(A) has grievously erred in law and on facts in rejecting the contention of the appellant that he had l/12th and not l/9th share in the land sold. The computation furnished to CIT(A) was not he admission on his part with regards his share or SDV of the land sold but the alternative contention, without prejudice to the main contention. 3.1 The appellant does not admit the conclusions/ findings given by both the lower authorities in so far as the same are against the appellant and contrary to law and/or on facts. The appellant may be permitted to produce additional evidence in this regards. 4.1 The Ld. CIT(A) has grievously erred in law and on facts in upholding the stamp duty valuation of Rs.1,11,69,055/-. In the alternative, the Ld CIT(A) ought to have referred the matter to Valuation Cell as per section-50C(2) of the Act. 3. As is evident from the grounds raised above, the solitary issue in the present appeal pertains to the capital gain earned by the assessee from sale of property liable to be taxed. The facts as noted from order of the authorities below is that the assessee had returned NIL capital gain from sale of the property after claiming deduction on account of investment of the sale consideration/capital gain in acquisition of new property as per section 54F of the Act while the AO had computed the capital gain at Rs.65,39,434/- making several adjustments to the sale consideration, the cost of acquisition of the ITA No.1453/Ahd/2017 3 property and denying the claim of exemption under section 54F of the Act. The matter was carried in appeal before the ld.CIT(A) where the assessee raised some fresh contentions both relating to the facts of the claim, as also to the provision of law applicable, both of which were dismissed by the ld.CIT(A) and the addition made to the income of the assessee by the AO by computing capital gain at Rs.65,39,434/- was upheld. Aggrieved by the same, the assessee has come up in appeal before us. 4. Before proceeding further, it is relevant to bring out the facts relating to the transaction resulting incapital gains earned by the assessee, as is revealed from order of the authorities below. The assessee had sold a plot of land situated at Survey No.196 at Moje Gota, Taluka-Daskroi, Dist-Ahmedabad along with eight other co- owners on 28.5.2012 for a sum of Rs.5.00 crores. In the return of income filed, the assessee had computed his capital gain earned thereon taking the impugned sale consideration relating to his share of property and after claiming exemption under section 54F of Rs.21.00 lakhs on account of investment of the consideration in purchase of residential property to the said extent. The AO computed the capital gain earned by the assessee by making the following adjustments to the calculation of the assessee: i) He substituted the actual sale consideration with the stamp duty value of the property as on the date of sale of Rs.10,05,21,500/- as per section 50C of the Act; the assessee’s share in the property was taken at 1/9 th ; ii) Indexed cost of acquisition of the property pertaining to assesses share was taken by the AO at Rs.7,44,733/- as against Rs.13,47,416/- claimed by the assessee. The AO ITA No.1453/Ahd/2017 4 had restricted indexed cost of acquisition to the extent of the property noted to be sold of 8,741 sq.meters as per the registered sale deed. The assessee, on the other hand, had claimed indexed cost of acquisition of property of 14,569 sq.meters claiming that, to the extent of 5528 sq.meters, the property had been acquired by the Government for weaker sections, and therefore, only the balance of 8,741 sq.meters was sold to the third party during the year. iii) The claim of exemption under section 54F of Rs.21 lakhs was denied to the assessee. The comparison of the capital gain returned by the assessee, and that computed by the AO as tabulated at page no.5 of the assessment order is as under: Particulars As per AO As per the assessee Sales consideration received by the assessee Rs.1,11,69,055/- Rs.55,55,555/- Less: Indexed cost of assessee’s share (852x87410/10) Rs.7,44,733/- Rs.13,27,416/- Less: Expenses related to conversion of NA Land Rs.38,84,888/- Rs.38,84,888/- Long Term Capital Gain earned by the assessee Rs.65,39,434/- NIL Less: Deduction claimed u/s.54 NIL Rs.21,00,000/- Taxable Long Term Capital Rs.65,39,434/- NIL 5. Before the ld.CIT(A) contention raised against the computation of capital gain by the AO to the tune of Rs.65.39 lakhs was that – i) The assessee’s share in the land was 1/12 th and not 1/9 th as taken by the AO; ITA No.1453/Ahd/2017 5 ii) An agreement to sell had been entered into on 5.2.2011 for sale of the property to one M/s.Vishwas Developers and sale was registered subsequently in the impugned year on 28.5.2012;That as per the terms of agreement, the purchasing party had paid the land premium payable for conversion of agricultural land to non-agriculture land to Govt. of Gujarat on behalf land owners of Rs.3,49,64,000/- on 4.3.2011, and thereafter had made remaining payment to the land owners for executing the sale deed on 28.5.2012.It was contended by the assessee that since the agreement to sell had been entered, and in lieu of which consideration also had been received by the assessee in the form of land premium paid directly to the Govt. of Gujarat on behalf of the land owners, as per provision to section 50C of the Act the jantri/stamp duty value of the land as on the date of agreement to sell was to be substituted as opposed to stamp duty value taken on the date of registration of sale; that jantri rate on the date of entering into agreement to sell was Rs.4,37,05,000/-, which needed to be substituted to the sale consideration received by the assessee, as opposed to stamp duty value of Rs.10,05,21,500/- as on the date of registration of sale deed taken by the AO. iii) Besides, the assessee had also challenged the denial of exemption on account of investment made in purchase of new residential property of Rs.21 lakhs in terms of section 54F of the Act. All the contentions of the assessee were rejected by the ld.CIT(A), as pointed out by us above. ITA No.1453/Ahd/2017 6 6. Before us, the ld.ounsel for the assessee has reiterated the contentions made before the ld.CIT(A). With regard to his contentions that the assessee’s share in the property sold was 1/12 th and not 1/9 th as taken by the AO, he pointed out that this fact had been pointed out to the AO during the remand proceedings by the ld.CIT(A) vide letter dated 17.2.2016 and 2.2.2016, which was placed before at PB Nos.79 and 62 respectively. The ld.counsel for the assessee pointed out that the AO had been pointed out the share of nine co-owners in the letter dated 2.12.2016 as under: Sr. No. Name of the seller PAN Share in Property 1. JadibenBhulabhaiVenidas CPYPP6625P 1/3rd 2. NirubenParshottamdas ACSPP9068P 1/12th 3. Pratimaben Alias Pratibhaben 'Parshottamdas AGAPP0480B 1/12th 4. NitinbhaiParshottamdas ABJPP8038P 1/12th 5. KiranbhaiParshottamdas AEIPP0638K 1/12th 6. PopatbhaiDhanjibhai AHEPP9746K 1/12th 7. JagdishbhaiDhanjibhai APCPP3224Q 1/12th 8. UshabenRajendrabhai BJEPP1175M 1/12th 9. AlkabenBhaskarbhai AVAPP9963A 1/12th 7. He contended that 1/12 th share arose to the assessee on account of the fact that his mother was owner of 1/3 rd share in the property, which had devolved onto her from her father and on her demise, her share had devolved to the assessee alongwith three coparceners, which resulted in1/12 th share in the hands of each person. He contended that even the family-tree had been supplied to the AO for clarifying this. The ld.counsel for the assessee contended that despite the same, the AO did not consider the ITA No.1453/Ahd/2017 7 explanation of the assessee vis-à-vis the 1/12 th share accrued to him in the property and summarily dismissed contentions of the assessee in his remand report filed to theld.CIT(A). He drew our attention to the remand report of the AO reproduced at page no.3 & 4 of the ld.CIT(A)’s order pointing out that the AO had merely mentioned that as per the sale deed, there were nine co-partners to the land including the assessee, and therefore, his contention of 1/12 th share in the land is accordingly rejected. He drew further attention to the finding of the ld.CIT(A) at para-5 of his order on this issue pointing out that while the ld.CIT(A) admitted additional evidence filed by the assessee, but in the same breath he held the evidences filed with regard to demonstrating the shares of the assessee’s property as non-admissible, and therefore, rejecting the contention of the assessee. Our attention was drawn to para-5 of the order of the ld.CIT(A) as under: “Decision 5. The first argume nts of the appellant is regarding the share in the property whether it is 1/9th or 1/12th. It is seen that during the course of assessment proceedings the assessment has been made by the A.O by considering the share of the appellant at l/9th. The same has not been disputed by the appellant at all. In fact the appellant himself has given computation of income in which the sale consideration has been shown at Rs. 11169055/- which clearly indicates that not only the appellant has accepted I/9th share in the sale of the said property, the appellant has also accepted the valuation as per sec.50C of the Act. However, during the course of appeal proceedings the appellant has raised the issue stating that the share of the appellant in the said property is I/12th and not 1/9th as has been assessed by the A.O. Since this issue was not raised ever before the A.O, still while filing the additional evidences, the appellant has not filed any evidences whatsoever regarding this issue at all. Later on vide letter dated 15/12/2016 the appellant has filed certain details including some evidences in support of his claim. However, the appellant has not filed any application under rule 46A for filing additional evidences regarding this claim. Even the additional evidences filed by the appellant during the course of appeal proceedings have been accepted, but there is no evidence or claim of the appellant regarding the share in the property. The appellant has ITA No.1453/Ahd/2017 8 not bothered to file the evidences as additional evidences, even though the appellant's additional evidences on other issues were duly accepted and sent to the A.O for his comments. The proceedings before the CIT(A) are not based on trial and error wherein the appellant keeps filing the evidences which were not produced before the A.O at all and for which the application under Rule 46A has not been made to the CIT(A). Therefore, the evidences filed by the appellant are not proper as the same has not been filed as per Rule, 46A of the I.T.Rules and accordingly rejected. No cognizance of these papers/evidences is being taken while deciding this appeal. It may also be mentioned here that no such ground of appeal has also been taken by the appellant either at the time of filing the appeal or during the course of appeal proceedings. It is a settled position of law that whatever are the grounds of appeal filed by the appellant can only be adjudicated upon by the undersigned, therefore, the arguments of the appellant on this issue are not accepted.” 8. The ld.DR relied on the findingof the AO in his remand report and on the order of the ld.CIT(A) in this regard. 9. We have considered contentions of both the parties on this issue raised by the assessee of the capital gain on sale of land being calculated by taking the assessee’s share in the same at 1/12 th as opposed to 1/9 th taken by the AO. We find merit in the contentions of the ld.counsel for the assessee. We have noted from the remand report of the AO that the basis for taking the assessee’s share at 1/9 th is that the sale deed mentioned nine co-owners in the property. It is not the Revenues case that the sale deed mentioned any share of co-owners ,but they merely presumed the share of all 9 co-owners to be equal, this despite the fact that the assessee had pointed out respective shares of each nine co-owner in his letter filed to the AO during the assessment proceedings, and had also explained the reason for the same by way of family-tree pointing out that the share of eight co-owners came to 1/12 th on account of application of Hindu Succession Law. The ld.CIT(A) also, we find dismissed this contention of the assessee for frivolous reasons stating that he refuses to admit additional evidence filed by the ITA No.1453/Ahd/2017 9 assessee. We find that while the ld.CIT(A) states that all additional evidences filed by the assessee were admitted by him, but in the subsequently states that vis-à-vis the shares of the assessee in the property sold, he refuses to admit additional evidence. There appears to be no clarity in the order of ld.CIT(A) on this aspect of the matter. Even otherwise, we find that the share of the assessee being a crucial aspect for determining the capital gains earned by the assessee, the ld.CIT(A) was not right in rejecting the admission of additional evidences. We therefore hold that rejection of the assessee’s claim of share in the property sold being 1/12 th by the Revenue authorities was without any basis and highly unjustified. We find that the assessee had clearly demonstrated his share in the property at 1/12 th and accordingly, we direct the AO to re-compute the capital gain taking the assessee’s share in the property as 1/12 th . This contention raised by the ld.counsel for the assessee is accordingly allowed. 10. Now we take up the next contention that the stamp duty value/jantri value of the land sold on the date of entering into agreement to sell should have been adopted as per the provision of section 50C of the Act. We do not find any merit in the same. The ld.counsel for the assessee in support of his contention has drawn our attention to the copy of the agreement to sell/memorandum of understanding entered into by the assessee with Vishwas Developers dated 10.9.2015,a copy of which was placed before us in PB Page no.95 to 101 dated 5.20210 (English Translation). He also drew our attention to the contentions made before the ld.CIT(A) to prove that actual agreement to sell had been entered into with the said party after the MOU was entered by demonstrating the fact that after entering into agreement to sell, the purchaser had paid premium to ITA No.1453/Ahd/2017 10 the Government for conversion of land from agriculture to non- agriculture and all permission for conversion of the said land was also taken thereafter. He contended that all these events substantiated the fact of acceptance of agreement to sell. Our attention was drawn to the submission made to the ld.CIT(A) in this regard produced at page no.5 of his order as under: Now in respect of the agreement for sale I would like to submit that the agreement for sale had been entered into on 5"' February, 2010 by the sellers. This can be verified from the fact that all the permissions had been applied for and much before the sale deed was executed, which is not possible if there was no agreement for sale. The application for conversion of land from new tenure to old tenure had been made on 28"' April, 2010 t the land revenue department as soon as the permission was received from government regarding the payment for land premium on conversion of land, the said premium was paid by the purchaser on behalf of the seller. Further since the land being an old tenure agricultural land it could not be bought by the purchaser being a firm and hence immediately an application for change in use of land from agricultural to non agricultural purpose was made to the land revenue department. After the said permission was received even application for passing of construction plans had been made and the said permission had also been received in July, 2011, and thereafter the balance payment was made by the purchaser and accordingly the sale deed was executed in May, 2012. The above events clearly show that all the permissions for construction were applied for much before the sale deed was executed and even the payments for the said permission had been made by the purchaser much before the sale deed had been executed which clearly substantiates the fact of the existence of the agreement for sale. For your verification all the above mentioned permissions as well as the copy of the bank statement of the purchaser substantiating the above mentioned payments has already been submitted to your honour.” 11. He also pointed out that premium paid by the purchaser on behalf of the owners of the land be treated as tantamounting to payment made to the seller of the land ,in compliance with the conditions stipulated in the proviso to section 50C requiring an agreement to sell being entered between both the parties prior to sale of property and payment being made to the purchasers of the property by cheque in lieu of the agreement to sell, on fulfillment of which conditions, the assessee be treated as entitled to substitute the sale consideration actually received with the stamp duty value as ITA No.1453/Ahd/2017 11 on the date of entering into agreement to sell as per the proviso to section 50C of the Act. The ld.DR however, relied on the order of the ld.CIT(A) at page no.8 to 10 as under, pointing out to us various infirmity in the agreement to sell casting doubt on the genuineness of the same. “The other argument of the appellant is regarding valuation as per Sec.50C of the I.T.Act. The appellant has filed a copy of the agreement for sale. However, on going through this agreement to sale, the following facts were noticed :- (1)This agreement has been shown to have entered into on 5/2/2010, however, on going through the whole agreement it is noticed that it is entered on a stamp paper dated 6/10/2009. This agreement is simply signed by all the parties without any date. However, in the last, the date has been mentioned as 5/2/2010 but there is a clear overwriting on the date with the pen which clearly shows that the date shown in the Agreement is not authentic. The appellant never produced the original Agreement to sale so that this fact could have been verified. Therefore, prima facie it appears that the date has been overwritten by using a pen to suit the appellant's explanation. (2) The so-called memorandum of agreement for sale has not been registered with any of the authorities. It has been made on a stamp paper which is dated 6/10/2009. If the so-called agreement to sale has been entered into on 5/2/2010 why the appellant would use the stamp paper of 6/ 10/2009. Moreover, it has not been registered with any of the authority or even notarized. (3) The purchaser of the property is a partnership firm, therefore, as per the law of the Gujarat State, partnership cannot buy an agricultural land. Apparently on 5/2/2010 this was an agricultural land, therefore, a partnership firm is not entitled to buy such land. Even on this ground, this agreement to sale is not proper. (4) There is no mention of this Agreement to sale whatsoever in the sale deed entered into between the parties which was entered into in 2012. If the contention of the appellant is even accepted for argument sake, the agreement to sale which is claimed to have been entered into by the appellant would have been mentioned in the final sale deed, however, there is no mention of such sale deed at all. (5) The agreement to sale shows the land admeasuring 15580 sq.mtrs, whereas as per the final sale agreement, the land sold is only 8741 sq.mtrs. The land in both the agreements cannot vary so much as has been claimed by the appellant. In fact as per the prevailing law in Gujarat State, a partnership firm is not allowed to ITA No.1453/Ahd/2017 12 buy agricultural land. Therefore, thje partnership firm cannot enter into an agreement to sale for 15580 sq.mtrs of land which is clearly agricultural land. Therefore, an agreement to sale for 15580 sq.mtrs is not possible. (6) In the final agreement to sale it has clearly been provided that the -Collectors order for conversion of the land has been dated 20/6/2011. Therefore, this land can be purchased by a partnership firm only after such conversion. When the Collector approved the conversion of the land on 20/6/2011 the agreement to sale for the same land could not have been entered on 2/5/2010. (7) The appellant never produced the original agreement to sale for verification before the undersigned. Therefore, it is clear that this is nothing but an afterthought which cannot be relied upon in view of the factors discussed above. In fact the A.O in the remand report has clearly held that the so-called agreement for sale dated 5/2/2010 is not an authentic document because it was neither registered with the Registrar nor an authorised document. This document was never produced before the A.O as a proof. Even on verification of the final sale deed, it can be seen that nowhere in the sale deed any mention about the alleged sale agreement made by the owners. Therefore, the agreement to sale filed by the appellant cannot be relied upon in view of the above mentioned factors. 12. We have heard rival contentions and we do not find any merit in the contentions of the ld.counsel for the assessee. The infirmity pointed out by the ld.CIT(A) vis-à-vis the agreement to sell have remained uncontroverted before us. The agreement to sell has been found to have stamped on 6.10.2009 while the agreement was entered into much later on 5.2.2010. There is also over-writing on the date mentioned in the agreement to sell. Most importantly, the original agreement to sell was never produced before the Revenue authorities. The fact that as per prevailing law of the State of Gujarat, a partnership firm could not have purchased an agriculture land, this agreement to sell between a partnership firm(M/s Vishwas Builders)as the buyer and the assessee as seller was in any case invalid. Further, the agreement to sell finds no mention in the final sale deed entered into between the parties. The fact that the agreement to sell is in relation to land admeasuring 15580 ITA No.1453/Ahd/2017 13 sq.meters, and the land actually sold as per the registered sale is only 8741sq.metershaswas also remained un-reconciled. In view of the above, we agree with the ld.CIT(A) that this agreement to sell was only an after-thought of the assessee, and the ld.CIT(A) therefore has rightly denied the benefit of proviso to section 50C of the Act. This contention of the ld.Counsel for the assessee of substitution of the sale consideration with the jantri value on the date of entering into agreement to sell is accordingly rejected. 13. The last contention before us was with regard to the claim of exemption under section 54F on account of investment of capital gain/ sale consideration in purchase of residential property to the extent of Rs.21 lakhs. The denial of the same, as per theld.CIT(A) is for the reason that the investment in the new property was not made within the period stipulated as per law. His finding in this regard at page no.6 of the order is as under: “6. Ground No.2 is regarding claim of the appellant us.54F. The appellant has filed the following submissions by letter dated 28/4/2016. "The appellant has made investment of Rs.21,00,000/- in flat in Saga Scheme. The appellant entered into agreement for purchase on 31.07.2013 and made majority of the payment within a period of 2 years from the date of sale. The last payment for purchase of flat was made on 28.03.2015. It is only that the sale deed was executed on 05.08.2015 which is outside the period of 2 years from the date of sale. The process of getting the sale deed executed is only a procedural aspect and hence the same should not be taken adversely. Also a copy of the agreement for purchase and sale deed is attached herewith for your verification. Thus would like to request you to allow the legitimate claim u/s.54F." The appellant has filed further submissions on this issue vide letter dated 15/ 12/2016. As per the provisions of sec.54F of the Act, it is clear that the exemption in this section is allowable if the appellant purchases residential property before one year or after two years of the date of sale of the original asset. In this case there is no dispute that the appellant has sold the land on 28/5/2012, therefore, as per the provisions of the Act, the residential property should have been ITA No.1453/Ahd/2017 14 purchased by the appellant either on or after 28/5/2011 or on or before 28/5/2014. In this case it is an undisputed fact that theappellant has entered, into an agreement for purchase of the property on 31/7/2013. It has also been provided in this agreement that the flat would be completed within 14 months from the date of execution of the banakhat. As has clearly been held by the A.O in the assessment order, this fact has not been disputed by the appellant either before the A.O or before the undersigned. Therefore, the 14 months are taken in to account from the date of banakhat, it is clear that the flat would be available to the appellant only on 30/9/2014 which is beyond two years from the date of sale of the original assets. It hasclearly been provided by the appellant during the course of appeal proceedings that the sale deed of the flat was executed only on 10/9/2015 which is even one year after the time stipulated as per the banakhat entered into by the appellant. As per the provisions of the Act the deduction is allowable if the appellant has brought a property within two years of the sale of the original asset. Since this is a beneficial provision the Hon'ble High Court and Hon'ble ITAT's have also interpreted that if there is a delay on the part of the builder in handing over the possession of the residential flat, the benefit of sec.54F cannot be denied to the appellant as the appellant has no fault of his own and therefore this being a beneficial provision, the deduction was allowed. However, in the present case the appellant has entered into a banakhat with the builder only on 31/7/013 and in that banakhat it has clearly been mentioned that the time period of this banakhat is 14 months from the date of execution of the banakhat. Therefore, the flat would only be delivered to the appellant by 13/9/2014 which is beyond two years as stipulated. Therefore, in this case the appellant has entered into an agreement for purchase of a flat which in itself is beyond two years. Therefore, there is a clear violation of the provisions of sec.54F of the Act and accordingly, the benefit of section cannot be extended. The grounds of appeal is accordingly dismissed.” 14. A perusal of order of the ld.CIT(A) reveals that as per the provision of law, the assessee is required to investment in new property by 28.5.2014 i.e. within two years from the date of sale of original property on 28.5.2012. The sale deed for purchase of the new property was executed on 5.8.2015 i.e. much beyond the specified date for purchase of new property. The ld.CIT(A) has noted that the assessee’s contention that he had paid for the entire consideration for the purchase of new property well within the period specified as per law and sale deed was not executed within the time ITA No.1453/Ahd/2017 15 only on account of the failure of the builder of the property, was factually incorrect. He has noted that the assessee had entered into agreement for purchase of new property on 31.7.2013 with the agreement providing that the property/flat would be completed within 14 months from the date of execution of Banakath i.e. 30.9.2014. Therefore, it was well within the knowledge of the assessee that he would be in possession of the property only by 30.9.2014. The time limit specified by laws for purchasing the property as noted above was 28.5.2014. Therefore, the assessee’s plea that the delay in acquiring the property was on account of fault of the builder was factually incorrect, and accordingly, this plea of the assessee was rejected. 15. We are not in agreement with the Ld.CIT(A) on the issue. It is not denied that the assessee had made complete investment of Rs. 21 lacs for purchase of property well within the stipulated time. It is only that the construction was completed later on and sale deed entered into on completion of construction. Courts have held the conditions for claiming exemption u/s 54F of the Act to be fulfilled in such circumstances. The Hon’ble Karnataka High Court in the case of CIT Vs Smt. Shantha Kumari (2015) 233 taxmann.com 347(Kar) has held that if after making complete payment merely because a registered sale deed has not been executed be it because construction was not completed in all respects, that would not disentitle the assessee from claiming the benefit u/s 54F of the Act. In view of the above, we hold that the assessee has substantially complied with the provisions of section 54F of the Act by making complete investment in purchase of flat. The assessee we ITA No.1453/Ahd/2017 16 hold is eligible to claim deduction u/s 54F of the Act of the amount invested of Rs.21 lacs. 16. In view of the above discussion, the contention vis-a-vis share of the assessee’ in the property sold being 1/12 th is accepted, as also his claim to deduction u/s 54F of the Act. The plea for taking jantri value on the date of entering into agreement to sell in terms of proviso to section 50C is rejected. The AO is directed to re-compute the capital gains accordingly. 19. The appeal of the assessee is partly allowed. Order pronounced in the Court on 24 th February, 2023 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 24/02/2023