LAKHMI CHAND,PALWAL, FARIDABAD vs. INCOME TAX OFFICER, WARD 1(4), FARIDABAD
Before: SHRI SATBEER SINGH GODARA & SHRI S. RIFAUR RAHMANAssessment Year: 2015-16
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2015-16, arises against the Commissioner of Income Tax (Appeals)/National
Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1070611171(1), dated
25.11.2024 involving proceedings under section 147 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’).
Assessee by Sh. Ankit Garg, Adv.
Sh. Deepanshu Singla, Adv.
Department by Sh. Ramesh Chand, Sr. DR
Date of hearing
13.05.2025
Date of pronouncement
13.05.2025
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Heard both the parties. Case file perused. 3. We note at the outset that both the learned lower authorities have disallowed the assessee’s section 54F deduction claim of Rs.75.20 lakhs, for the sole reason that he had sold/transferred a residential plot than residential house, in the assessment in question framed on 27.09.2021 and upheld in the CIT(A)/NFAC’s lower appellate discussion, reading as under: “6.1 After careful consideration of relevant facts, assesee’s submission and case laws relied upon by appellant, the assessee is not eligible to claim exemption u/s 54 F. 6.2 I have gone through the facts of the case and material available on record and the case is being decided considering the same. In this case, the assessee had sold residential plot in Gurgaon worth 99,95,000/- and earned capital gain of 61,94,857/- and made investment in residential house worth 75,20,000/- in Palwal and claimed deduction under section 54 of the income tax act 1961. The appellant has claimed exemption under section 54, which has rightly been disallowed by the assessing officer. As per section 54 of income tax act, the specific asset eligible for claim of deduction under section 54 is transfer of long-term capital asset being a residential house. 6.3 A simple perusal of the facts of the case shows that the Appellant has sold a residential plot and not a house. During the course of assessment proceedings, the assessee was given multiple opportunities, but he has not been able to justify his claim. 6.4 During the course of appeal proceedings, the case of assessee was fixed for several times giving opportunity to prove the claim filed by appellant during the appellate proceedings, but the appellant has not filed any submission in support of his claim. 6.5 The assessee in the grounds of appeal has claimed exemption under section 54F against the sale of residential plot. A careful perusal of section 54F, shows that the claim of appellant is non- tenable as this exemption is not available for sale of residential plot. 6.6 Section 54F of Income Tax Act 1961 provides an exemption on long-term capital gains when selling a capital asset other than a residential house, such as shares, stocks, bonds, or gold. 6.7 The Income tax section 54F exemption is available to individuals and Hindu Undivided Families (HUFs). Other entities, 3 | P a g e such as companies or partnerships, do not qualify under this provision. 6.8 The capital gain must arise from the sale of any capital asset, excluding a residential house. This means that the gain can come from selling assets like stocks, bonds, or commercial properties. 6.9 Accordingly, it is held that the appellant is not eligible to claim exemption under section 54F. Hence after careful consideration of all the facts, all the grounds of appeal are hereby dismissed.”
This is what leaves the assessee aggrieved who is in appeal before the tribunal.
4. The Revenue vehemently supports the impugned section 54
deduction disallowance that sale/transfer of a residential house forms a condition precedent in such an instance and the assessee herein has failed to prove his residential plot as being used as a residential house, so as to satisfy the rigor thereof. It could hardly dispute the clinching fact that the assessee had indeed sold/transferred the relevant residential plot forming a capital asset; and, therefore, his case is very well covered under section 54F deduction in the given facts, since satisfying all other conditions.
5. We thus accept the assessee’s alternative prayer raised in the course of hearing in very terms. Both the learned lower authorities’
action making the impugned disallowance of section 54F claim at the assessee’s behest stands reversed.
All other pleadings herein stand rendered academic.
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This assessee’s appeal is allowed. Order pronounced in the open court on 13th May, 2025 (S. RIFAUR RAHMAN) JUDICIAL MEMBER
Dated: 13th May, 2025. RK/-