CIT vs. GAURAV SAKLANI
What did the High Court hold?
The appellate authorities rightly accepted the assessee's stand. Merely including the residential property in the balance sheet as a fixed asset is not determinative, especially since no depreciation was claimed and the assessee resided in the property.
What were the facts?
The assessee, an individual and director/shareholder, sold shares and claimed capital gains exemption under Section 54F for purchasing a residential property. The Assessing Officer denied the exemption because the property was listed in the company's balance sheet as a business asset.
What were the issues?
Whether including a residential property in the balance sheet as a fixed asset disqualifies it for capital gains exemption under Section 54F when the assessee is an individual and resides in the property.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 264/2012 . . . CIT ..... Appellant . Through Mr. Sanjeev Sabharwal, Sr. Standing Counsel. . . . versus . . . GAURAV SAKLANI ..... Respondent . Through Nemo. . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 02.05.2012 . . . The respondent-assessee, who is an individual and director and shareholder of a company M/s Idiscoveri Educational Services Private Limited, had sold shares of the said company and had earned profit in . form of capital gains of Rs.59,12,127 out of which Rs.49 lacs was received during the assessment year 2007-08. This amount was claimed to be exempt under Section 54F of the Income Tax Act, 1961 as the assessee had purchased a residential property at Gurgaon. . 2. It is not disputed that the assessee is an individual and income from capital gains was earned. The Assessing Officer, however, did not allow benefit under Section 54F of the Act on the ground that the assessee had included the newly purchased property in the schedule of business assets in the balance sheet. He has, however, recorded in the assessment order that the assessee had not claimed any depreciation but held that there was no ambiguity about the assessee?s intention. . 3. In our opinion, the appellate authorities have rightly accepted the stand of the assessee as the purchase of the residential property is not denied. The respondent assessee is an individual and merely showing the aforesaid newly acquired residential property in the list of assets in the balance sheet is not determinative. The appellate authorities have recorded that balance sheet was a personal balance sheet and the new asset was shown under the head ?fixed assets?. It is also observed that in the subsequent years the assessee had not claimed depreciation and in fact was residing in the property. The appeal is dismissed. We refrain from imposing cost as the appeal has been dismissed in limine. . . . SANJIV KHANNA, J. . . . . . . . R.V. EASWAR, J. . MAY 02, 2012 . VKR . $ 7. .
More judgments on Section 54F
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- Ramakrishna Reddy Makireddy, Hyderabad vs ACIT, Circle-5(1), HyderabadITA 70/HYD/2026[2007-08]Status: Disposed16 Oct 2026AY 2007-08
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- Renu Arun Talwar, Mumbai vs Circle 17(1), MumbaiITA 204/MUM/2026[2012-13]Status: Disposed16 Oct 2026AY 2012-13
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