MURALI VITHIYA,NAGAPATTINAM vs. ITO, WARD-1,, KUMBAKONAM

ITA 3219/CHNY/2025Status: DisposedITAT Chennai06 October 2026AY 2014-1513 pages
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What did the Tribunal hold?

The Tribunal held that the issue of valuation under Section 50C was to be restored to the AO for verification of documents relating to four properties. The Tribunal noted that the Revenue agreed to this course of action. The Tribunal clarified that the verification would be limited to whether the Ambattur property was vacant land, the Perambur-Madhavaram property was land and transferred prior to the relevant date, and the Subramaniyapuram properties belonged to the assessee's mother-in-law. If these facts are established, the assessee's claim for deduction under Section 54F would be allowable. The Tribunal allowed the appeal for statistical purposes with this limited direction for verification by the Jurisdictional Assessing Officer (JAO). The Tribunal made it clear that the matter was not being restored for fresh adjudication on any other issue regarding Section 54F eligibility. The operative direction was to restore the issue to the JAO for limited verification.

What were the facts?

The assessee, an individual, sold a jointly owned vacant land for Rs. 1.50 crores, while the guideline value was Rs. 6,27,84,000/- for Assessment Year 2014-15. The assessee's return was filed after a notice under Section 147. The Assessing Officer (AO) referred the case to the Departmental Valuation Officer (DVO) for fair market value determination but proceeded with assessment adopting the guideline value due to the DVO's delay. The Commissioner of Income Tax (Appeals) [CIT(A)] also adopted the guideline value and computed long-term capital gain. The Tribunal had previously remanded the issue to the AO to obtain a DVO report. The AO again completed the assessment without the DVO report, making additions and disallowing Section 54F deduction. The CIT(A) remitted the Section 50C issue to the AO for DVO valuation but rejected the Section 54F claim.

What were the issues?

1. Whether the Tribunal's direction to obtain a DVO valuation report under Section 50C(2) was complied with by the AO, and if not, whether the assessment order is bad in law? (Question of law and fact, turning on Section 50C(2) and the Tribunal's previous order). Assessee's contention: The AO failed to comply with the Tribunal's specific direction to obtain the DVO's valuation, rendering the assessment order illegal. The valuation adopted under Section 50C should be deleted. Revenue's contention: Not recorded in the judgment. 2. Whether the assessee is eligible for deduction under Section 54F of the Act, considering the ownership of other properties? (Question of mixed law and fact, turning on Section 54F(1) proviso). Assessee's contention: The new asset acquired was the only residential house owned by the assessee. The rejection of the Section 54F deduction by the AO is erroneous. The assessee provided documentary evidence showing that other properties were either vacant land, sold prior to the relevant date, or belonged to her mother-in-law. Revenue's contention: The assessee owned more than one residential property, evidenced by rental income from one property and wealth-tax exemption claimed for another, thus disentitling the assessee to the deduction under the proviso to Section 54F(1).

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 50C,Section 50C(2),Section 54F,Section 254

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA

For Respondent: Smt. Anshu Sharawat, Addl. CIT
Hearing: 21.08..2026Pronounced: 06.10.2026

PER S. R. RAGHUNATHA, AM :

The present appeal has been preferred by the Assessee against the order dated 27.10.2025 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld. CIT(A)”], arising from the assessment order dated 31.03.2024 passed by the Assessing Officer, Assessment Unit, National Faceless Assessment Centre [hereinafter referred to as “th

The order continues below.

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