Assessee had claimed deduction under section 54F in respect of sale of land at Jambhe against purchase of residential property from India Bulls Properties Ltd. AO denied the claim of deduction under section 54F to assessee on the ground that assessee purchased India Bulls property jointly along with his wife and therefore, assessee was not the full onwer of property. Held: Indiabulls property was under construction and possession was handed over to assessee only on 28-12-2016, till such time income from said property was not chargeable under the head 'Income from house property' and hence condition stipulated in clause (b) of proviso to section 54F(1) disentitling claim under section 54F was not satisfied. Therefore, assessee's claim was allowable.
IN THE ITAT, MUMBAI BENCH
VIKAS AWASTHY (J.M.) & GAGAN GOYAL (A.M.)
Anant R Gawande v. Asstt. CIT
I.T.A No. 5453/Mum/2019
14 June, 2022
Assessee by : Anil Sathe
Department by : Anoop Hiswase, DR
Gagan Goyal (AM)
This appeal has been filed by the assessee against the Order, dated 17-6-2019 passed by the Commissioner (Appeals)-55, Mumbai for the assessment year 2013-14.
2. The grounds raised by the assessee pertain to grant of deduction under section 54F of the Income Tax Act, 1961.
3. The facts governing the issue are that assessee, an individual, derives income from salary, business, LTCG and Income from other sources, has filed his return of income on 29-9-2013 declaring total income at Rs.45,03,410. The return of income filed by the assessee was selected for scrutiny under CASS. The assessee had claimed deduction under section 54F in respect of sale of land at Jambhe against purchase of residential property from India bulls Properties Ltd. Assessee also claimed deduction under section 54 on Long Term Capital Gain (LTCG) of Rs.30, 46,299 earned by selling Pune Kohinoor flat. During the course of scrutiny, assessing officer gathered information that assessee has purchased one more residential property after investment in property purchased from India bulls Properties Pvt Ltd. When confronted, assessee produced purchase agreement of Pune Abhimanshree CHS Ltd property. On going through the said agreement, the assessing officer noticed that this flat was purchased by assessee for a consideration of Rs.7.3 crore. The assessee explained that the assessee has purchased one more residential house other than the new asset on 04/05/2013 and that this transaction is within a period of one year after the date of transfer of original asset. Accordingly, applying proviso (a)(ii) to section 54F assessee was asked as to why his claim under section 54F should be allowed. In response, assessee explained that at the time of selling the land at Jambhe on 17-7-2012, the assessee held one property of India Bulls for which payment was made in the year 2009 and Pune property was purchased on 04/05/2013; therefore, as on 17-7-2012, the assessee had only one residential house at India bulls. This property was purchased within a period of two years from the date of sale of Jambhe land. Hence, the Pune property qualifies for deduction under section 54F. The assessing officer, however, did not agree with the contentions of the assessee. He observed that the assessee along with his wife signed the application form, which explicitly mentioned as below:-