SHRI RASIK BALLABH RASTOGI,LUCKNOW vs. INCOME TAX OFFICER- 6(3), LUCKNOW

ITA 445/LKW/2019Status: DisposedITAT Lucknow24 September 2026AY 2014-1518 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee's claim for deduction under section 54F was not substantiated. The assessee failed to provide formal agreements with contractors, details of work assigned, or bills. No valuation of incomplete construction was provided. The delay in construction due to litigation was not a valid reason as the dispute was settled in 2013. Therefore, the purported advances of Rs. 72,52,250/- were disallowed, upholding the AO and CIT(A)'s decision. Regarding the addition under section 56(2)(vii)(b)(ii), the Tribunal held that the purchase of a flat in a multi-storey building includes the cost of the right to use common amenities, and since the cost was less than the stamp duty value, the addition of Rs. 3,95,000/- was confirmed. For the addition of Rs. 40,000/- towards household withdrawals, the Tribunal agreed with the assessee that the addition was based on suspicion without cogent material. Neither the AO nor the CIT(A) provided evidence of actual expenditure exceeding drawings or insufficient drawings. Thus, this addition was deleted. Ground 4 was dismissed as general. Ground 5 was dismissed as not pressed due to lack of evidence. The appeal was partly allowed.

What were the facts?

The assessee, Rasik Ballabh Rastogi, filed an appeal against the order of the CIT(A)-2, Lucknow, dated 30.04.2019, which partly allowed his appeal against the Assessing Officer's order for Assessment Year 2014-15. The AO had passed an order under section 143(3) on 31.01.2017. The assessee initially claimed a deduction under section 54B, later revised to section 54F, for Rs. 1,87,44,438/- on account of investment in a new residential house. The AO disallowed this claim, noting that the assessee had not utilized the net consideration for purchase or construction and had not deposited the unutilized amount in the capital gains account. The AO also made additions of Rs. 3,95,000/- under section 56(2)(vii)(b)(ii) on the purchase of land and Rs. 40,000/- for alleged low household withdrawals. The CIT(A) partly allowed the assessee's appeal, confirming the additions under section 54F and section 56(2)(vii)(b)(ii), but deleted the addition for low household withdrawals.

What were the issues?

1. Whether the CIT(A) erred in not allowing the full deduction of Rs. 1,87,44,440/- under section 54F, as the assessee claimed to have appropriated the amount for construction despite minor litigation delaying it. - Assessee's contention: Full deduction should be allowed as the amount was appropriated, and delay was due to minor litigation. - Revenue's contention: Not recorded. 2. Whether the CIT(A) erred in confirming the addition of Rs. 3,95,000/- under section 56(2)(vii)(b)(ii) on the purchase of a plot of land, as the section was allegedly not applicable and the DVO was not referred to for market value. - Assessee's contention: Section 56(2)(vii)(b)(ii) is not applicable, and DVO reference was not made. - Revenue's contention: The purchase price was less than the stamp duty value, making the section applicable. 3. Whether the CIT(A) erred in confirming the addition of Rs. 40,000/- towards alleged low household withdrawals without cogent material. - Assessee's contention: Addition is based on whims and fancies and should be deleted. - Revenue's contention: Not recorded. 4. Whether the additions were excessive and contrary to facts, law, and principles of natural justice. - Assessee's contention: Additions should be quashed/annulled. - Revenue's contention: Not recorded. 5. Whether the CIT(A) failed to provide a proper opportunity to the assessee to present his case. - Assessee's contention: Order passed without adequate opportunity should be quashed. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 54F,Section 56(2)(vii)(b)(ii),Section 143(3),Section 139(4),Section 44AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW ‘B’ BENCH, LUCKNOW

For Respondent: Smt. Pratibha Singh, Addl CIT DR
Hearing: 06.07.2026Pronounced: 24.09.2026

PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. CIT(A)-2, Lucknow dated 30.04.2019, wherein the ld. CIT(A) has partly allowed the appeal of the assessee against the order of the ld. Assessing Officer for the assessment year 2014-15, that was passed under section 143(3) of the Income Tax Act, 1961 on 31.01.2017. The grounds of appeal are as under:- “1. The Ld. Commissioner of Income Tax (Appeals)-2. Lucknow (here-in-after referred to as the Ld. CIT (Appeals) grossly erred on facts and in law in not allowing the full deduction of Rs.1,87,44,440/- and confirming an amount of Rs.67.96.870-us 54F of the Act in construction of new house property as the appellant had duly purchased the land and had pa

The order continues below.

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