SUJIT DHARAMDAS PATEL ,MUMBAI vs. ITO WARD 19(3)(1), MUMBAI

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ITA 4939/MUM/2025Status: DisposedITAT Mumbai23 December 2025AY 2016-17Bench: MS. KAVITHA RAJAGOPAL (Judicial Member), SHRI OMKARESHWAR CHIDARA (Accountant Member)6 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal restored the issue to the file of the AO for a denovo assessment, allowing the assessee one more opportunity to furnish documentary evidence to substantiate the claim for deduction u/s. 54F.

What were the facts?

The assessee filed a return of income and claimed a deduction u/s. 54F of the Act on investment in a property. The Assessing Officer (AO) disallowed the deduction for failure to furnish documentary evidence. The CIT(A) upheld the AO's order.

What were the issues?

Whether the disallowance of deduction u/s. 54F is justified on account of failure to furnish documentary evidence, and if an opportunity for denovo assessment should be granted.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(1),Section 143(2),Section 142(1),Section 143(3),Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: AND SHRI OMKARESHWAR CHIDARA, AM Shri Rajchandraji Marg,

For Appellant: Shri Dharmesh Shah &, Ms. Mitali Parekh
For Respondent: Ms. Kavitha Kaushik, Sr. DR
Hearing: 30.09.2025Pronounced: 23.12.2025

O R D E R Per Kavitha Rajagopal, JM:

This appeal has been filed by the assessee, challenging the order of the Learned Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], National Faceless Appeal Centre (‘NFAC’ for short) passed u/s. 250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2016-17.

2.

The assessee has raised the following grounds of appeal:

1. The Ld. CIT(A) has erred in law and in fact by not appreciating that the Ld. A.O. has passed an order u/s. 143(3) of the Act which is bad in law and illegal.

Mr. Sujit Dharamdas Patel 2. The Ld. CIT(A) has erred in law and in facts in confirming the disallowance made by Ld. A.O. on account of deduction claimed by appellant u/s. 54F of the Act of Rs. 2,90,00,000/- in respect of investment made in the house property.

3. The appellant craves leave of Your Honour to add to, alter, amend and/ or delete all or any of the foregoing grounds of appeal.”

3.

Brief facts of the case are that the assessee is an individual and had filed his return of income dated 22.05.2017 declaring total income at Rs.16,08,670/- and the same was processed u/s. 143(1) of the Act. The assessee’s case was selected for limited scrutiny under CASS and notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. The Learned Assessing Officer (“Ld. AO” for short) observed that the assessee had transferred properties of market value amounting to Rs.2,15,00,000/- and Rs.75,00,000/- respectively during the year under consideration and had claimed deduction u/s. 54F of the Act by investing the said amounts in the property developed by Indiabulls.

The assessee was required to produce the documentary evidences to substantiate his claim of deduction u/s. 54F of the Act. The Ld. AO passed the assessment order u/s. 143(3) of the Act dated 26.12.2018 determining the total income at Rs.3,06,08,670/- after making an addition/disallowance of Rs.2,90,00,000/- u/s. 54F of the Act on the ground that the assessee has failed to furnish the relevant documentary evidences in support of his claim.

4.

Aggrieved, the assessee was in appeal before the first appellate authority, who vide order dated 27.05.2025 upheld the addition made by the Ld. AO on similar ground that the assessee has failed to furnish the relevant documentary evidences to substantiate his claim.

5.

Aggrieved, the assessee is in appeal before us, challenging the order of the Ld. CIT(A).

6.

We have heard the rival submissions and perused the materials available on record.

It is observed that the assessee has sold two lands with a market value of Rs.2,15,00,000/- and Rs.75,00,000/- respectively and had invested the same in an under construction property developed by the builder and developer Indiabulls. The assessee had claimed deduction u/s. 54F of the Act. Both the lower authorities had made the disallowance of Rs.2,90,00,000/- towards the deduction u/s 54F of the Act on the ground that the assessee has failed to furnish the documentary evidences such as agreement of purchase, ownership proof, allotment letter from the builder, possession certificate, neither before the Ld. AO nor before the Ld. CIT(A) in spite of several opportunities provided by both the lower authorities.

7.

Before us, the Ld. A.R. for the assessee prayed that the assessee be given one more opportunity to present his case before the lower authorities and filed relevant paper book containing documents, some of it was filed before the Ld. AO and some before the Ld. CIT(A). In order to extend the assessee with one more opportunity to corroborate his claim with sufficient documentary evidences, we deem it fit to restore this issue to the file of the Ld. AO with a direction that the assessee shall comply with the proceedings before the Ld. AO without any undue delay from his side and to furnish complete documentary evidences to substantiate his claim of deduction u/s. 54F of the Act. The Ld. AO is directed to conduct a denovo assessment on the basis of the documentary evidences proposed to be filed by the assessee and decide the issue on the merits of the case and in accordance with law after giving sufficient opportunity of hearing. purposes.

Order pronounced in the open court on 23.12.2025

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