26 May 2015
Flats booked via Builder falls within the purview of construction. Hence, timelimit of 3 years after date of transfer is applicable. Please clarify if letter of allotement is received before date of transfer and possession is sought to be received within prescribed 3 years will the exemption u/s 54 shall be available ?
26 May 2015
Why do you think that FLAT booked through builder falls under "CONSTRUCTION"? According to me, it falls under PURCHASE. (In either case, the possession plays dominant role. A "completion Certificate" from the Local Authority (Corporation, Municipality etc)always prove if the dwelling unit is habitable. So, more than letter of allotment and/or possession, completion certificate from LA proves more weightage)
26 May 2015
Board Cir. No. 471 dtd. 15-10-1986 (162 ITR (St) 41) has clarified that cases of allotment of flats under the self financing scheme of the Delhi Development Authority (DDA) should be treated as cases of ‘construction’ for the purposes of Ss. 54 and 54F.
Similarly, the Board Cir. No. 672 dtd. 16-12-1993 (205 ITR (St) 47) has clarified that allotment of flats/houses by co-op. societies and other institutions, whose schemes of allotment and construction are similar to those of DDA (as mentioned in para 2 of aforesaid Cir. No. 471), would be treated as ‘construction’ for the purposes of Ss. 54 and 54
26 May 2015
There is no ambiguity as regards to whether case falls within purchase or construction, the only matter which merits attention is whether compliance of S.54 is made in case allotment letter is received prior to date of transfer
26 May 2015
In both the above cases, date of possession is crucial.
(The circular, however, can NOT be generalised to include each and whatever cases of booking a flat through builder and promotor. The focus in the circulars is on SELF FINANCING SCHEME which may please be taken note of)
26 May 2015
Sir, the second circular vide No 672 and also decision in case of Kishore H. Galaiyavs are very clear with regards to that aspect that flats booked via builder amounts to construction.
26 May 2015
Date of Possession is relevant for cases covered by "Purchase" of Propery as held in CIT V Mrs Shahzada Begum. However, for cases covered by "construction" there are several conflicting judgements.
26 May 2015
You may be right but be careful about interpretation. Kishor's case is applicable for Maharashtra not for the rest of India. Secondly, facts and the circumstances of Kishor's case are to be followed in toto in order to apply the same.
Anyway, my contention is be cautious and careful in applying the case laws and circulars...
I repeat... the answer to your query is... Date of possession be taken as the date.
CAclubindia
