MIHR LAL CHANDRA,KOLKATA vs. ITO, WARD 40(1),, KOLKATA

The assessee is in appeal before the Tribunal raising the following grounds of appeal:

Brief facts of the case are that the assessee is a retired super senior citizen pensioner who retired from a public sector undertaking and had filed the return of income for the AY 2017-18 on 23.02.2018 declaring the total income at ₹11,82,940/-. The original assessment was completed u/s 143(3) of the Act accepting the returned income. Subsequently, the Ld. PCIT initiated revision proceedings u/s 263 of the Act, setting aside the assessment to verify exemptions claimed u/s 54EC and 54 of the Act on long-term capital gains derived from the sale of an immovable property for ₹2,55,00,000/-. During the fresh assessment proceedings, the Ld. AO observed that the assessee had failed to furnish substantial documentary evidence, including the purchase deed, an agreement supporting the cost of improvement, and a registered document demonstrating investment in a new flat for the exemption claimed under section 54 of the Act. Consequently, the Ld.

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that the issue involves is the deduction claimed u/s 54 of the Act. It was submitted that the assessee had purchased a new flat and had sold his flat for a sum of ₹2.5 crore following which the assessment was completed and the claim was allowed in limited scrutiny. The Ld. PCIT revised the assessment order and as is mentioned in para 4.6.4 of the order of the Ld. Assessing Officer, the authenticity of the bills was not accepted by him as it was not proved. The assessee has filed a supplementary paper book before us and our attention was drawn to pages 12 and 13 thereof which is the notice u/s 142(1) of the Act dated 12.09.2019 and on page 14 the reply to the notice u/s 142(1) of the Act dated 30.09.2019 is filed online and ITA No(s). 3197/KOL/2025 Assessment Year(s) 2017-18 on 13.11.2019 reply to the notice u/s 142(1) of the Act being the second notice is enclosed and on 19.11.2019 the assessee filed the reply to the second notice issued, which is at page 16 of the supplementary paper book. It was submitted that the deed for purchase of new house was filed before the Ld. CIT(A) and our attention was drawn to pages 29 to 72 of the first paper book filed before us which is the purchase deed of new property. The Ld. CIT(A) in para 5.4 has discussed the issue of claim of the deduction u/s 54 of the Act and has held that the Ld. AO was correct in denying the deduction claimed. It was submitted that the sale had taken place on 29.11.2016 as per the sale deed filed before the Ld. CIT(A) and which is available from pages 13 to 28 of the paper book. The agreement for purchase was dated 10.10.2018. The payment was made from August 2017 to October 2017 and the total payment of ₹1,42,75,000/- was made as per page 73 of the paper book which is a memo of consideration and which was also filed before the Ld. CIT(A). When asked to inform whether the agreement was registered, the Ld. AR said that the same was not registered.

The Ld. DR stated that the matter can be sent to Ld. AO for re- examination of the whole issue and if the claim is correct, the claim can be allowed.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). Since the required documents for the claim of deduction u/s 54 of the Act had not been considered and only the indexed cost of purchase as well as the indexed cost of improvement was allowed by the Ld. CIT(A), therefore, in the interest of justice and fair play it was considered by the Bench that the request of the assessee to remand the matter before the ITA No(s). 3197/KOL/2025 Assessment Year(s) 2017-18 Ld. AO may be considered. Therefore, the findings of the Ld. CIT(A) in respect of the denial of deduction claimed u/s 54 of the Act are reversed and the issue is remanded before the Ld. AO. The assessee shall furnish all evidences in support of the claim that he was eligible for claim of deduction u/s 54 of the Act on account of the capital gain so worked out and the Ld. AO shall consider the documents and after granting an opportunity of being heard to the assessee, decide the issue of claim of deduction u/s 54 of the Act in accordance with law. Hence, the grounds related to this issue are partly allowed for statistical purposes.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 20th July, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 20.07.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Kolkata Benches, Kolkata.

Guard File. //// By order