DCIT, CENTRAL CIRCLE-2, NOIDA vs. AJAY GOEL, HARYANA

ITA 1459/DEL/2023Status: DisposedITAT Delhi18 August 2025AY 2020-2120 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee is eligible for deduction under Section 54F of the Income-tax Act, 1961. The Tribunal followed the decision of the Coordinate Bench of ITAT, which held that the word 'own' in Section 54F implies full and whole ownership, and shared interest in a property does not constitute absolute ownership. The Tribunal noted that the assessee was not the absolute owner of the residential flat in Goa, as it was jointly owned with his wife and later his share was transferred to his daughter. Even if considered a deemed owner under Section 27(1), he remained a co-owner, not an absolute owner. Therefore, the exemption under Section 54F could not be denied. Regarding the indexed cost of acquisition of shares, the Tribunal found that the Ld. CIT(A) had considered detailed ledger accounts and verified the investments and transfer of shares. As this was a factual issue, the Tribunal did not interfere with the Ld. CIT(A)'s findings. The grounds raised by the Revenue were dismissed.

What were the facts?

The Revenue appealed the order of the Ld. CIT(A) dated 15.02.2023 for Assessment Year 2020-21. The assessee had declared an income of Rs.12,50,39,770 and sold shares for Rs.17,50,00,000, showing a Long Term Capital Gain (LTCG) of Rs.15,95,71,381. The assessee claimed a deduction of Rs.3,68,14,462 under Section 54F for purchasing an apartment in Pune for Rs.3.37 crores. The Assessing Officer (AO) rejected the claim, noting the assessee owned three other house properties and that the conditions for Section 54F were not met. The AO also disallowed the indexed cost of acquisition of Rs.1,54,28,619 as unexplained. The assessee argued that due to a family settlement, he was not the absolute owner of any residential property prior to the sale of shares.

What were the issues?

1. Whether the assessee is eligible for deduction under Section 54F of the Income-tax Act, 1961, on the investment made in a residential property in Pune, considering his ownership status of other properties. Assessee's Contention: The assessee contended that following a family settlement recorded on April 5, 2019, he ceased to be the absolute owner of Residential Property-2, Chandigarh, and Residential Property-1, Kurukshetra, was transferred to his son. Residential Property-3, SRS Kurukshetra, remained jointly owned with his wife. Therefore, on the date of the capital asset transfer, he was not the absolute owner of any residential property, making the investment in the Pune property eligible for Section 54F deduction. The assessee also relied on the principle that shared interest in a property does not amount to absolute ownership. Revenue's Contention: The Revenue's appeal implicitly challenges the Ld. CIT(A)'s decision to allow the Section 54F deduction, as the AO had rejected it on the grounds that the assessee owned other properties and the conditions of Section 54F were not met. The Revenue also contested the allowance of the indexed cost of acquisition.

Which sections of the Income-tax Act were involved?

Section 54F,Section 143(2),Section 142(1),Section 27(1),Section 32

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES ‘A’, NEW DELHI.

Before: SHRI SATBEER SINGH GODARA & SHRI S.RIFAUR RAHMAN

For Appellant: Shri Kanchan Kaushal, Advocate
For Respondent: Shri Rajesh Tiwari, Sr. DR
Hearing: 21.05.2025

PER S.RIFAUR RAHMAN,AM:

1.

The Revenue has filed appeal against the order of the Learned Commissioner of Income-Tax (Appeals), Kanpur - 4 [“Ld. CIT(A)”, for short] dated 15.02.2023 for the Assessment Year 2020-21. 2. Brief facts of the case are, assessee filed its return of income on 15.02.2021 for the AY 2020-21 declaring an income of Rs.12,50,39,770. The case was selected for complete scrutiny under CASS. Notices under section 143(2) and 142(1) of the Income-tax Act, 1961 (for short ‘the Act’) were issued and served on the assessee. In response, assessee submitted relevant information as called for through ITBA Portal.

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The order continues below.

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