Capital Gain Exemption u/s 54F cannot be Allowed for Sale and Purchase of Plots: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ), Hyderabad Bench, has recently, in an appeal filed before it, held that capital gain exemption under section 54F cannot be allowed for sale and purchase of plots.

The aforesaid observation was made by the Hyderabad ITAT, when an appeal was preferred before it by an assessee, as against the order passed by the Commissioner of Income Tax (Appeals), Hyderabad, dated 29.05.2017 for the AY 2013-14.

The grounds of the assessee’s appeal being as to whether, on the facts and in the circumstances of the case the order of the case, the Commissioner (Appeals) ought not to have confirmed the assessment ofaddition under the head capital gains by re- computation withoutallowing deduction u/s. 54 of u/s. 54F alternatively, the facts pertaining to the issue were that the assessee was an individual, who had filed her return of income on 30.07.2013 for the AY 2013-14, admitting total income of Rs.4,88,937/- consisting of income fromhouse property of Rs.1,02,945/-, long term capital gain ofRs.3,60,837/- and income from other sources of Rs.25,155/- andagricultural income of Rs.90,000/.

Subsequently, the AO finalized the assessment proceedings and calculated the long-term capital gains at Rs.63,55,216 by disallowing the claim of the assessee u/s. 54 of the Income Tax Act, which was further confirmed by the CIT(A), leaving the assessee to prefer the instant appeal before the ITAT Bench.

With no one appearing on behalf of the assessee during the course of proceedings, despite repeated notices sent to the assessee, while Shri Kumar Aditya, the Sr.AR,drewthe attention of the ITAT Bench towards the finding of the CIT(A), the ITAT Panel consisting of Shri Rama Kanta Panda, the Accountant Member, along with Shri Laliet Kumar, the Judicial Member, observed:

“We have gone through the order passed by the ld.CIT(A), wedo not find any reason to interfere in the order passed by theld.CIT(A) on merit. In this present case, the assessee has filed thepresent appeal after a long delay of 2080 days. Before us, noexplanation has been given by way of affidavit explaining thereasons of filing the appeal after such a long period. In view of theabove when no explanation has been given by the assessee, theappeal is highly time barred and therefore, is required to bedismissed on thisground allowed.”

Thus, dismissing the assessee’s appeal, the Hyderabad ITAT held:

“Though, we have mentioned hereinabove, the appeal of the assessee is time barred, however, we have also examined the order passed by the ld. CIT(A). The perusal of the order clearly shows that the assessee had sold and purchased the plots only and has not acquired any residential house within the meaning of law. Further, as mentioned by the ld. CIT(A), the assessee is having more than two houses, therefore, the assessee is not entitled to any claim u/s. 54F of the Income Tax Act In the light of the above, the assessee has no case of merit, which is duly mentioned by the ld. CIT(A) in the order passed by him. Accordingly, this appeal is dismissed.”

To Read the full text of the Order CLICK HERE

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