DCIT, CIRCLE-3(1), HYD, HYDERABAD vs. C.M. RAJESH, HYD, HYDERABAD

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ITA 142/HYD/2016Status: DisposedITAT Hyderabad24 November 2021AY 2009-106 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, finding that one of the properties was an open plot and there was no evidence of the assessee purchasing another residential house within the specified period. Therefore, the conditions for disallowance under Section 54F were not met.

What were the facts?

The Revenue appealed against the CIT(A)'s allowance of a Section 54F deduction to the assessee for AY 2009-10. The Assessing Officer had disallowed the deduction, citing that the assessee owned more than one residential house and had purchased another house within one year of the asset transfer.

What were the issues?

Whether the assessee was eligible for Section 54F deduction when owning multiple properties and purchasing another residential house within the stipulated time frame.

Which sections of the Income-tax Act were involved?

Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘ B ‘ BENCH, HYDERABAD.

Before: SHRI A. MOHAN ALANKAMONY & SHRI S.S. GODARAShri C. M. Rajesh,

For Appellant: Shri Rohit Majumdar (D.R.)

O R D E R Per Shri S.S. Godara, J.M. : This assessee’s appeal for Asst. Year 2009-10 arises from the Commissioner of Income Tax (Appeals)-3, Hyderabad’s order dt.17.11.2015 passed in case No.976/DC 3(1)/CIT(A)-3/14-15 in proceedings under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (‘the Act’).

Heard both the parties. Case file perused.

2.

Coming to the Revenue’s sole substantive grievance that the CIT(A) has erred in law and on facts in allowing the assessee 54F deduction claim of Rs.5,70,41,313/-, we note that lower appellate discussion to this effect read as under :

“ 4.1 Ground Nos.2 & 3 are on the issue of disallowance of 54F claim of Rs.5,70,41,313 for the A.Y. 2009-10.

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3.

Mr. Majumdar vehemently contended during the course of hearing that the Assessing Officer had rightly disallowed the assessee's impugned deduction in view of the fact that he owned more than one residential house in light of section 54F(1) proviso (a)(i) of the Act. We find no merit in the Revenue’s instant argument. This is for the reason that atleast one of the said twin residential properties i.e. situated in Sagar Society, Navodaya Colony was found to be an open plot without any residential house raised thereupon as per the Assessing Officer’s remand report in 2008-09’s appeal proceedings. The same has already attained finality therefore.

4.

The Revenue’s next argument quotes 54F(1) proviso (a)(ii) that an assessee is not entitled for the impugned deduction if he purchases any residential house other than the new asset, within a period of one year after the date of transfer of the original asset. We note in this backdrop that the assessee had claimed the impugned section 54F deduction for having reinvested his capital gains in a house property bearing H.No.8-2-293/82/A/801, Jubilee Hills Co-operative House Building Society, Road No.36, Jubilee Hills, Hyderabad in issue. There is no material that he has purchased any other such house, within the specified period of one year in foregoing proviso i.e. transfer of the shares in M/s. Rithwik Projects (P) Ltd. in the impugned assessment year 2009-10 only. We make it clear that the Revenue has nowhere sought to dispute that transfer of assessee's shares took place in Assessment Year 2009-10 (Para 2.1 in assessment order) only. We therefore find no reason to accept the Revenue’s instant latter argument as well.

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