DURDANA KHATOON,HYDERABAD vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-8(1)., HYDERABAD

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ITA 1096/HYD/2017Status: DisposedITAT Hyderabad12 July 2021AY 2009-103 pages
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What did the Tribunal hold?

The Tribunal allowed the assessee to raise additional grounds related to Section 54 relief, finding that the necessary facts were on record. However, the disallowance of the Section 54F deduction was upheld because the assessee owned more than one residential property.

What were the facts?

The assessee claimed a deduction under Section 54F for reinvesting capital gains from the sale of a residential house. Both the Assessing Officer and the CIT(A) disallowed this claim. The assessee also sought to raise additional grounds related to Section 54 relief.

What were the issues?

Whether the assessee is entitled to Section 54F deduction when owning multiple residential properties, and whether additional grounds related to Section 54 can be admitted.

Which sections of the Income-tax Act were involved?

Section 54F,Section 54

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Income Tax Appellate Tribunal, HYDERABAD BENCHES : BENCH “B” HYDERABAD

Before: SHRI S.S. GODARA & SHRI L.P. SAHU

Hearing: 17/06/2021

For Assessee: Shri P. Murali Mohana Rao, C.A. For Revenue: Sri Rohit Mujumdar, D.R. Date of Hearing : 17/06/2021 Date of Pronouncement : 12 /07/2021 O R D E R PER S.S. GODARA, J.M. This Assessee’s appeal for A.Y. 2009-10 arises against the CIT(A) -1, Hyderabad’s order dated 28..02..2017 passed in case no. 229/2014-15, involving proceedings u/s 143(3) of the Income Tax Act, 1961 [ in short ‘the Act’].

Heard both the parties. Case file perused.

2.

The assessee’s sole substantive grievance raised in the instant appeal in light of her main grounds no. 1 to 7 challenges correctness of both the lower authorities’ action disallowing her sec.54F deduction claim of Rs.22,27,524/- in the course of assessment framed on 28.12.2011 and Smt. Durdana Khatoon upheld in the CI(T(A)’s order. A perusal of the instant case file further suggests that the assessee has also filed her petition dated 18.2.2021 inter alia pleadings 8th to 12th substantive grounds as well. Her case is that she is rather entitled for sec.54F eduction for having sold her residential house property during the relevant PY giving raise to long term capital gains which stand re-invested in yet another similar nature of capital asset. She has also quoted the CBDT’s circular issued way back on 11.04.1955 that the field authorities should recover only legitimate income tax than taking advantage a tax payer’s ignorance of law.

3.

The Revenue has vehemently opposed admission of assessee’s foregoing additional substantive grounds that the same tend to give altogether a new texture to her already pleaded grievance of sec.54F deduction. 4. We find no merit in Revenue’s foregoing technical stand. This tribunal‘s Special Bench in All Cargo Global Logistics Ltd. (2012) 137 ITD 26 (Mum), after taking into consideration hon’ble apex court’s landmark judgement in National Thermal Power Co. Limited vs CIT (1998) 229 ITR 383 (SC), holds that we can very well entertain such an additional ground raising a legal issue so to determine correct tax liability of an assessee provided all the relevant facts are on record. Learned DR fails to dispute that whatever are the necessary particulars in the assessee’s already raised claim of sec.54F deduction, apply mutatis mutandis in sec.54 relief as well.

5.

Faced with this situation, we uphold both the learned lower authorities’ action disallowing the assessee’s sec.54F deduction claim for the reason that she owned/possessed more than one residential property which formed the primary reason for rejecting the same and direct the Assessing officer to adjudicate the same in light of the necessary conditions stipulated in sec.54 of the Act. The assessee or her authorised representative shall appear before the Assessing officer on or before 31st October, 2021 in consequential proceedings to be followed by three effective opportunities of hearing.

Smt. Durdana Khatoon This assessee’s appeal is partly allowed for statistical purposes in above terms. Pronounced in Open Court on 12th July, 2021.

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