Claim of Capital Gain Deduction u/s 54 of Income Tax Act towards Purchase of Two Adjacent and Joint Flats for the Purpose of one Residence Unit: ITAT Restores Matter to AO for Verification [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) restored the matter to the file of the Assessing Officer (AO) for verification and examination to allow claim of capital gain deduction under Section 54/54F of Income Tax Act,1961 towards purchase of two adjacent and joint flats for the purpose of one residence unit.

The assessee Amrik Sokhi in this case claimed deduction under Section 54/54F of Income Tax Act. The AO disallowed the benefits of deduction claimed by the assessee.

Aggrieved by the order the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)],which confirmed the action of AO.

Further aggrieved the assessee filed an appeal before the Tribunal.

The Authorised Representative of the assessee (AR) submitted that the CIT(A) has erred in law and on facts in confirming the action of AO in not allowing the benefit of deduction of Rs.1,42,419/- claimed by the assessee under Section 54F of the Income Tax Act.

The AR further submitted that the CIT(A) has erred in law and on facts in confirming the action of  AO in not allowing the benefit of deduction of Rs.67,71,823/- claimed by the assessee under Section 54 of the Income Tax Act and that too by recording incorrect facts and findings and in violation of principles of natural justice and not appreciating/considering the submissions furnished by the assessee.

It was further submitted that when the assessee had purchased two flats for the purpose of use of the same as one residential unit then the assessee is entitle to get benefit under Section 54/54F of the Income Tax Act for second flat also. He further submitted that this fact may be verified and examined at the level of AO.

The Departmental Representative (DR) supported the orders of the lower authorities.

The Bench comprising of G.S Pannu, President and Chandra Mohan Garg, Judicial Member restored the matter to the file of the AO for verification and examination of fact as to whether the assessee has purchased two adjacent and joint flat for the purpose of using the same as one residential unit and after being satisfied to allow the benefit of exemption under Section 54 and 54F of the Income Tax Act.

The appeal of assessee was allowed for statistical purposes.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates