NARAYAN SWAROOP GARG , AJMER ,AJMER , RAJASTHAN vs. ASSISTANT COMMISSIONER OF INCOME TAX , AJMER , CIR -I , AJMER

P a g e | 1 ITA No. 984/JPR/2025 Narayan Swaroop Garg IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,“B” BENCH, JAIPUR BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No. 984/JPR/2025 (Assessment Year:2017-18)

Narayan Swaroop Garg Vs. DCIT/ACIT Prop. M/s Sanitary and Circle-2, Tube Distributors, Naya Ajmer Bazar, Ajmer �थायीलेखासं./जीआइआरसं./PAN/GIR No: ABBPG0514F Appellant .. Respondent

Appellant by : Sh. Mahendra Gargieya, Adv. Respondent by : Sh. Gaurav Awasthi, JCIT

Date of Hearing 19.03.2026 Date of Pronouncement 26.05.2026 O R D E R Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order of National Faceless Appeal Centre/Ld. Commissioner of Income Tax Appeals(hereinafter referred to as “Ld. CIT(A)”) dated 05.06.2025 u/s 250 of the Income Tax Act,1961 (hereinafter referred to as “Act”).

P a g e | 2 ITA No. 984/JPR/2025 Narayan Swaroop Garg 2. The sole issue involved in this appeal as to whether the assesssee is eligible for claim of deduction u/s 54F of the Act, amounting to Rs.1.73 crores. 3. The brief facts of the case are that the assessee sold a property andin respect of capital gains earned on such property,the assessee claimed deduction u/s 54F of the Act, claiming that the assessee has constructed a residential house from the amount received from the sale of property. The Assessing Officer (in short ‘the AO’), however held that the construction was not completed within 3 years from the date of sale of the property. He also made certain field inquiries and photographs were also clicked which have also been placed on the file. The case of the assessee is that out of total claim of deduction of Rs. 1.73 crores, the assessee has incurred Rs. 1.41 crores on the purchase of residential plot itself, whereupon, the construction was started. He has submitted that though, there may be some delay on the part of the contractor in completing the construction, however, as on the end of the 3 years from the date of sale of property, the unit had become habitable. The assessee had started residing there and had also obtained electrical connection and water connection etc. 4. On the other hand, the ld. DR has submitted that the approval for construction was granted by competent authority on 31.05.2016 and it is highly improbable that the assessee could have constructed the house by 13.06.2016 i.e., the date which comes on the end of three years from the date of sale of property.

P a g e | 3 ITA No. 984/JPR/2025 Narayan Swaroop Garg 5. We have heard rival submissions and gone through the record. The provisions of Section 54F providing deduction to the assessee’s for purchase or construction of residential houses are beneficial provisions with the aim and object to promote construction of residential houses in the country. Therefore, these beneficial provisions are required to be interpreted liberally. In the case in hand, out of the total claim of Rs. 1.73 crores, the assessee had already spent a sum of Rs.1.41 crores on the purchase of the residential plot. The assessee has claimed that the remaining amount of Rs. 20 lakhs was spent on construction by the end of the 3 years from the date of sale of his property. The ld. AR has submitted that the plot was purchased on 28.01.2016 and the residential house was also constructed thereupon. However, there was some procedural delay in complying and getting approval for construction from the competent authority. He has also referred to the photographs taken by the field officer of the AO, which shows that there was substantial construction of the house on the land in question. The fact on the file is that the assessee had purchased a residential plot and constructed a house thereupon. If due to certain unavoidable reasons, some delay in completing the construction has occurred, that cannot be said to be fatal to the case of the assessee for claiming deduction u/s 54F of the Act. The assessee has principally complied with the relevant provisions of construction a new house within the stipulated time period. Moreover, the major amount was incurred for the purchase of plot whereupon the residential house was constructed and only the small amount of Rs.20 lakhs has been claimed towards construction

P a g e | 4 ITA No. 984/JPR/2025 Narayan Swaroop Garg cost. Therefore, considering the overall facts and circumstances of the case, we find it fit a case for grant of deduction u/s 54F of the Act. In view of this, impugned order of ld. CIT(A) is set aside and the addition made by the lower authorities is ordered to be deleted. 6. In the result, the appeal of the assessee stands allowed. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 26/05/2026.

Sd/- Sd/- (Ratnesh Nandan Sahay) (Sanjay Garg) Accountant Member Judicial Member Dated 26.05.2026 Ganesh Kumar, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur