The Tax Publishers2022 TaxPub(DT) 7134 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 54F

Where assessee made mistake in working of exemption under section 54F, claim of assessee for excess exemption under section 54F rightly disallowed.

Capital gains - Deduction under section 54F - Mistake in working of exemption under section 54F -

Assessee filed his return of income and declared a total income of Rs.8,45,749. In assessment originally completed under section 143(3) total income of assessee was determined by AO at Rs.9,45,750. Said assessment was subsequently reopened and a notice under section 148 was issued by AO. In response to said notice, a reply was filed by assessee stating that return filed by him originally may be treated as return filed in response to notice under section 148. During course of assessment proceedings, a mistake in computing exemption under section 54F, as claimed by assessee at Rs.79,18,030 as against Rs.74,29,385, was pointed out by AO and assessee was called upon by him to explain as to why excess claim made by him for exemption under sections 54F and 54EC should not be disallowed. AO did not find submission made by assessee to be tenable and held that assessee was entitled for deduction under sections 54F and 54EC only to extent of Rs.74,29,385 as against Rs.79,18,030, he disallowed excess claim of Rs.4,88,645 made by assessee. In appeal, CIT(A) also proceeded to confirm disallowance made by AO on account of assessee's claim for exemption under section 54F to extent of Rs.4,88,645. Held: Exemption under section 54F was wrongly claimed by assessee at Rs.59,18,030 after taking into consideration amount of Long Term Capital Gain at Rs.79,18,030 as against net Long Term Capital Gain of Rs.59,18,030 after reducing exemption of Rs.20,00,000 claimed under section 54EC. This mistake in working of exemption under section 54F was accepted by authorized representative of assessee and keeping in view same, CIT(A) upheld action of AO in disallowing claim of assessee for excess exemption of Rs.4,88,645 under section 54F. No infirmity was found in impugned order of CIT(A) in confirming disallowance made by AO on this issue. Appeal was dismissed.

REFERRED :

FAVOUR : Against the assessee

A.Y. :



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