INCOME TAX ACT, 1961

Section 54F

Capital gains - Deduction under section 54F - Assessee furnished required details of construction of house -

Assessee claimed deduction under section 54F stating that the assessee along with his wife had jointly constructed a house. The assessee failed to furnish evidences with regard construction of house with bills, approved plan, accounts and certificate of permission given by Gram Panchayat for construction of house. Therefore, AO disallowed the deduction and taxed long term capital gains, which was confirmed by CIT(A). Held: The assessee submitted a certificate from Gram Panchayat confirming the construction of house property on the site. Sarpanch has also signed the letter duly signed and stamped the certificate. The AO without making any enquiries disbelieved the claim of the assessee and disallowed the deduction. If the AO did not believe the certificate or considered the same as bogus, the AO ought to have made enquiries and disproved the genuineness of the certificate issued by the Gram Panchayat. Since the assessee had furnished the required details and constructed the house at the village. There was no any reason to disallow the deduction claimed by the assessee under section 54F. Thus, the addition made by the AO was deleted.