The Income Tax Appellate Tribunal, Jaipur Bench has upholds allowing deduction u/s 54F for purchased new house property since residential house properties are shown as stock in trade in books of account.
The appellant, Shri Goverdhan Prasad Singhal, during the course of assessment proceedings claimed deduction under section 54F against long term capital gain for purchased new house property. The AO alleging that the appellant has ownership of more than one residential house and disallowed the deduction. On appeal the CIT (A) holds that the assessee is eligible to avail deduction u/s 54F of the Act and directed the AO to allow deduction u/s 54F of the Act, in computing long term capital gain from the sale consideration of land, valued at Rs.9,90,99,000/-. against which the revenue filed appeal before ITAT.
The Tribunal observed that the other residential houses are unsold properties of the trading business of the appellant and the appellant himself has reflected the seven residential house properties as stock in trade in his books of account. Thus, the said residential houses cannot be taken as capital asset within the meaning of Section 2(14) of the Act. Accordingly, it cannot be held that the appellant owned more than one residential house as on the date of transfer of the impugned properties.
The Coram of Dr. Meetha Lal Meena, AM and Smt. S. Seethalakshmi, JM has held that “the assessee had purchased new house property within specified period as per provisions of Section 54 of the Act and the conditions stipulated u/s 54F stands fulfilled by the assesse. Thus, taking into consideration, the facts, circumstances of the case and written submissions of the assessee, we feel that the CIT(A) has been justified in judiciously allowing the deduction u/s 54F of the Act, to the assessee and therefore, we concur with the findings of the ld. CIT(A)”.
Mr. S.L. Gupta, CA and Mr. Manoj Nehar appeared for appellant and revenue respectively.
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