RAJIV KUMAR NANDLAL VARMA,MUMBAI vs. ASSTT. COMMISSIONER OF INCOME TAX -23(3),, MUMBAI

On the facts and in the circumstances of the case, the learned assessing officer erred in not allowing deduction u/s.54 of the Income Tax Act being investment made in acquisition of the new flat.

(a) The learned assessing officer erred in stating that, the agreement dt: 18th October, 2012 did not confer right to the appellant in the new residential flat which is contrary to the facts and evidence on record. The appellant prays that it had acquired right of ownership to the flat purchase being Flat No.1001, 11th Floor, C wing Gurgaon

(b) The learned assessing officer also failed to appreciate that, the payment for the purchase of the new flat was made out of the deposit from Capital Gain Deposit Scheme wherein the amount received on sale of old flat was deposited. Thus the appellant had purchase new flat by paying for it.

The learned assessing officer erred in not allowing deduction on account of transfer fees and donation of Rs.2,75,000/-which deduction be allowed in full since the expenses incurred is wholly and exclusively in connection with such transfer.

(b) The learned A.O erred in stating that, both bonds totaling to value of Rs. 1,00,00,000/-(Rs. One Crore Only) have not been place on record.

(c) The learned A.O erred in stating that, deduction u/s 54EC cannot be allowed in full and restricted to Rs.50,00,000/-

(d) The appellant prays that, the entire deduction of Rs.1,00,00,000/-(Rs.One Crore only) be allowed since the investment is made as per the provisions of Section S4EC.

The appellant craves leave to add amend or alter any or all of the grounds of appeal.”

The brief facts of the case show that assessee is a non-resident individual being resident of Abu Dhabi/ Dubai. He owned a flat at Mumbai, which was sold on 9th October, 2012. The assessee claimed deduction under Section 54 as well as under Section 54 EC of the Act. The assessee filed return of income on 19th February, 2014, declaring total income of ₹58,13,533/-. The return was picked up for scrutiny and notice under Section 143(2) of the Act was issued on 3rd September, 2014, the assessee has shown income from other sources and long term capital gain.

The assessee preferred the appeal before the learned Commissioner of Income-tax (Appeals).The learned CIT (A) noted that there is a delay in filing of the appeal by two years and 11 months and therefore, deficiency letter was issued to the assessee on 4th March, 2020, however, as per ld CIT (A), assessee did not file any communication for condonation of delay, he dismissed the appeal for non-compliance, non-

Before us, the learned Authorized Representative submitted that against deficiency letter dated 4th March, 2020, issued by the learned CIT (A), assessee filed its response electronically on 7th March, 2020 and further furnished physically to learned CIT (A)-13, Mumbai on 9th March, 2020. The assessee also submitted a letter dated 28th August, 2023, in response to letter dated 22nd August, 2023, on this issue. The National Faceless Appeal Centre, Delhi [the learned CIT (A)], ignored both these letters and dismissed the appeal of the assessee for non-prosecution. He referred to his paper book containing 44 pages to show these respective letters. He therefore submitted that without considering the explanation of the assessee regarding delay in filing of the appeal and further clarification, the appeal was disposed off against the assessee. Further, on the merits of the case, he submitted that with respect to the deduction under Section 54 of the Act is covered in favour of the assessee as there is endorsement in the name of the assessee coupled with payment to the buyer. He also submitted that the learned Assessing Officer has wrongly relied upon the decision of the Hon'ble Supreme Court in case of Suraj Lamp & Industries (P.) Ltd. vs. State of Haryana 14 taxmann.com 103 (SC) rendered in respect of Section 54 of the Transfer of Property Act and applied thereto for denial of deduction under Section 54 of the Act. He submit that Hon'ble Delhi High Court, after considering the above decision has held that even where the assessee acquired property by provisional booking, he was eligible for deduction under Section 54 of the Act. He also submitted that assessee can also draw a support from the decision of the Hon'ble Supreme Court in case of

The learned Departmental Representative supported the order of the learned lower authorities.

We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that the

In the result, the appeal filed by the assessee is allowed for statistical purposes.