PRAVIN ASHUMAL KESHWANI,AHMEDABAD vs. THE DY.CIRCLE-3(1)(1), AHMEDABAD

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ITA 1615/AHD/2025Status: DisposedITAT Ahmedabad15 July 2026AY 2022-234 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 54F does not mandate a completion certificate and that the assessee had provided sufficient evidence of construction within the stipulated period. The denial of deduction on technical grounds was deemed unjustified.

What were the facts?

The assessee sold a property and purchased a plot to construct a new residential house. The Assessing Officer (AO) denied deduction under Section 54F, stating the plot was purchased before one year of the sale. The CIT(A) upheld the disallowance citing lack of a completion certificate.

What were the issues?

Whether deduction under Section 54F for construction of a new residential house can be denied solely for the lack of a completion certificate when other evidence of timely construction is available.

Which sections of the Income-tax Act were involved?

Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Ms. Yashvi Mashruwala, AR, Shri Ram Tiwari, CIT. DR
For Respondent: Shri Ram Tiwari, CIT. DR
Hearing: 09/07/2026Pronounced: 15/07/2026

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD

BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 1615/Ahd/2025 (िनधा�रण वष� / Assessment Year : 2022-23) Pravin Ashumal Keshwani बनाम Dy. Commissioner of / 8, Shrushti Bungalows, Income Tax Vs. Ashwamegh Char Rasta, Circle -3(1)(1), Satellite, Ahmedabad, Ahmedabad Gujarat - 380015 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ADAPK9539K (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Ms. Yashvi Mashruwala, AR ��यथ� क� ओर से/Respondent by : Shri Ram Tiwari, CIT. DR

Date of Hearing 09/07/2026 Date of Pronouncement 15/07/2026 (आदेश)/ORDER Per Sanjay Garg, Judicial Member:

The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”), dated 03.07.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2022-23.

ITA No.1615/Ahd/2025[Pravin Ashumal Keshwani vs. DCIT] A.Y. 2022-23 - 2 – 2. The sole dispute involved in this appeal is relating to the denial of deduction by the AO u/s.54F of the Act on construction of a new residential house.

3.

The brief facts of the case are that the assessee sold a property on 19.07.2021. The assessee had already purchased a plot for construction of a residential house on 18th March, 2021. After the sale of the property, the assessee started construction of a new residential house upon the said land. During the assessment proceedings, the AO show caused the assessee as to why not the capital gain tax be not levied on the income earned on sale of land by the assessee. The assessee, however, claimed that as per the provisions of Section 54F of the Act, if the assessee constructs a new house within three years from the sale of the property in question, the assessee will be eligible to claim deduction u/s.54F of the Act. The assessee furnished the requisite documents before the AO to show that the assessee has constructed a new house within three years from the sale of the property / capital asset. However, the AO noted that the plot in question, upon which, the house was constructed, was purchased before one year from the transfer of the capital asset. He, therefore, denied the deduction u/s 54F of the Act.

4.

During the appellate proceedings before the Ld. CIT(A), though, the Ld. CIT(A) did not confirm the addition on the issue, observing that there was no embargo to construct a house on the

ITA No.1615/Ahd/2025[Pravin Ashumal Keshwani vs. DCIT] A.Y. 2022-23 - 3 – already purchased a plot may be prior to one year from the transfer of capital asset, however, he confirmed the disallowance citing other reasons that the assessee had not furnished the completion certificate etc. before the AO from which it can be proved that the construction was completed within three years from the date of transfer of capital asset.

5.

We have heard the rival contentions and gone through the record. The assessee, in this case, had produced before the AO the copy of the ledger and various bills and invoices showing that the assessee has spent considerable amount for the construction of the new house. The AO had not disputed that the assessee had not constructed the residential house on the plot in question within three years. It is only for the first time that the Ld. CIT(A) observed that the completion certificate etc. was not placed on the file. A perusal of the provision of Section 54F of the Act would reveal that there is no requirement for furnishing completion certificate. If the assessee, with the convincing evidence on the file, shows that he has constructed a new residential house within stipulated period, in our view, the deduction u/s 54F of the Act cannot be denied. We agree with the contention raised by Ms. Yashvi Mashruwala, Ld. AR of the assessee that the requisite evidences showing that the assessee had constructed a new house were duly furnished before the AO, which had not been disputed by the AO. The intention of the legislature for allowing deduction u/s 54F of the Act is to promote construction of residential houses

ITA No.1615/Ahd/2025[Pravin Ashumal Keshwani vs. DCIT] A.Y. 2022-23 - 4 –

and, therefore, the provisions of Section 54F of the Act being beneficial provisions, the requisite relief cannot be denied to the assesse on such technicalities of furnishing of completion certificate. In view of this, we do not find justification on the part of the lower authorities in denying the deduction to the assessee u/s 54F of the Act. The impugned order of the Ld. CIT(A) is set aside. The appeal of the assessee stands allowed. The AO is directed to grant the deduction u/s 54F of the Act to the assessee.

6.

In the result, the appeal preferred by the assessee stands allowed.

This Order pronounced on 15/07/2026

Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 15/07/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��यथ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, 5. ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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