The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently held that Capital gain exemptions under Section 54F of the Income Tax Act, 1961 are beneficial provisions, therefore it should be interpreted liberally.
Section 54F of the Income Tax Act provides exemptions to long term capital gains earned by the assesee from capital asset other than house property.
Assessee T. Pandian, filed his return of income for the assessment year 2016-17 declaring an income of Rupees 9, 88,060/- .After completing the scrutiny assessment the assessing officer found that The assessee has claimed deduction under section 54F in respect of property purchased for consideration of 2,00,00,000/-
Assessing Officer has denied the claim of deduction under Section 54F of the Income Tax Act on the ground that the assessee has not fulfilled the procedural requirement laid down by the law of depositing into the capital gain account scheme with a nationalized bank before the due date of furnishing of return.
Aggrievd assesee filed appeal before the CIT(A). On appeal, by considering the submissions of the assessee as well as various case law, the CIT (A) confirmed the disallowance of the deduction claimed under Section 54F of the Income Tax Act. Thereafter, the assesee filed appeal before the Tribunal.
D. Anand, Advocate counsel appearing for the assessee relied upon the decision of the case of CIT v. Smt. Umayal Annamalai submitted that the provisions of Sec. 54F of the Income Tax Act are beneficial provisions and are to be considered liberally in the aspect of limitation period.
D. Hema Bhupal counsel appearing for the revenue supported the decision of the lower authorities.
The tribunal of V. Durga Rao, Judicial Member and G. Manjunatha, Accountant Member observe that The assessee has claimed deduction under section 54F of the Income Tax Act in respect of property purchased for a consideration of ₹.2,00,00,000/-.
Assessing Officer denied the claim of deduction under Section 54F of the Income Tax Act on the ground that the assessee has not fulfilled the procedural requirement laid down by the law of depositing sale proceeds into the capital gain account scheme with a nationalized bank before the due date of furnishing of return,
Thereafter, the bench determine that the “provisions of section 54F of the Income Tax Act are beneficial provisions and are to be considered liberally in the aspect of limitation period. But, the investment in residential property is must which the assessee has proved with evidence and complied before the lower authorities.’’ Hence, the bench allowed the appeal of the assesee.
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