LAKHMI CHAND,PALWAL, FARIDABAD vs. INCOME TAX OFFICER, WARD 1(4), FARIDABAD

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’).

Heard both the parties. Case file perused.

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,