VIJAY NATWARLAL SHAH,AHMEDABAD vs. THE ITO, WARD-3(3)(5), AHMEDABAD

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ITA 1238/AHD/2026Status: DisposedITAT Ahmedabad06 July 2026AY 2012-133 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 54F is a beneficial provision and the assessee should not be denied deduction when the investment was made within the time limit, even if construction was delayed by the developer.

What were the facts?

The assessee sold a property and invested the sale proceeds in a new residential house within the stipulated period. However, the construction of the new house took longer than expected due to the developer's delay.

What were the issues?

Whether the assessee is eligible for deduction under Section 54F when the construction of the new residential house was delayed by the developer, despite timely investment of sale proceeds.

Which sections of the Income-tax Act were involved?

Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG

For Appellant: Shri Jyotish Shah, A.R, Shri Veerabadram Vislavath, Sr. DR
For Respondent: Shri Veerabadram Vislavath, Sr. DR
Hearing: 30/06/2026Pronounced: 06/07/2026

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

BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER

आयकर अपील सं./I.T.A. No. 1238/Ahd/2026 (िनधा�रण वष� / Assessment Year : 2012-13)

बनाम Vijay Natwarlal Shah Income Tax Officer / 30, Aakash Neem Society, Ward-3(3)(5), Ahmedabad Vs. Opp. Nehru Foundation, Thaltej, Ahmedabad, Gujarat - 380054 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ACJPS9056P (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Jyotish Shah, A.R. ��यथ� क� ओर से/Respondent by : Shri Veerabadram Vislavath, Sr. DR

Date of Hearing 30/06/2026 Date of Pronouncement 06/07/2026

(आदेश)/ORDER

The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-1, Gurugram (hereinafter referred to as “CIT(A)”), dated 20.03.2026 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2012-13.

ITA No.1238/Ahd/2026[Vijay Natwarlal Shah vs. ITO] A.Y. 2012-13 - 2 –

2.

Though, the assessee has taken numerous grounds of appeal, however, the sole issue involved in this appeal relating to the denial of deduction u/s 54F of the Act.

3.

The brief facts of the case are that the assessee sold a property on 19.10.2011 for a sale consideration of Rs.30 Lakhs. Thereafter, the assessee booked a residential house with the developer, namely, M/s. Navratna Organisers & Developers Pvt. Ltd. and executed an agreement on 28.02.2012 and the purchase consideration was settled at Rs.40 Lakhs. Thus, the assessee had paid amount of more than Rs.30 Lakhs in the F.Y. 2011-2012 itself. Therefore, the entire amount received by the assessee on sale of property was invested, within one year from the sale, for the purchase of a new residential house. However, the builder took some more time in constructing the house.

4.

It has been held time and again that the provisions of Section 54F of the Act are beneficial provision aimed at promoting the construction of residential houses by the citizens. The assessee had duly invested the amount for the purchase of a new residential house well within the stipulated period. The completion of construction was not in the hands of the assessee as the assessee was dependent upon the Developer. Under similar facts and circumstances, it has been held time and again that the assessee cannot be denied deduction u/s 54F of the Act. Accordingly, the

ITA No.1238/Ahd/2026[Vijay Natwarlal Shah vs. ITO] A.Y. 2012-13 - 3 –

impugned order of the Ld.CIT(A) is set aside and I direct the AO to grant deduction to the assessee u/s 54F of the Act.

5.

In the result, the appeal of the assessee stands allowed.

This Order pronounced on 06/07/2026

/- Sd/- (SANJAY GARG) JUDICIAL MEMBER Ahmedabad; Dated 06/07/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��यथ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,

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

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