The Income Tax Officer
ITA No. 1955/Bang/2019
Assessment Year : 2016-17
Decision in favour of: AssesseeTHE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE
The assessee is an individual and filed her return of income for the year under consideration on 05.08.2016 declaring a total income of Rs. 8,66,860/-. The said return was selected for scrutiny and statutory notices were issued to the assessee. For which assessee submitted a required response.
From the assessment order, AO noted that assessee had declared income from other sources of Rs. 8,66,860/- and long term capital gains of Rs. Nil. A.O observe that assessee had claimed deduction u/s. 54F for cost of acquisition of residential property. AO observed that assessee also constructed a residential house on the same property. The difference between the total Capital Gains and the cost of construction was brought to tax and the Long Term Capital Gains was computed.
AO was of the opinion that the property acquired by the assessee on 10.02.2011 was before the transfer of the original asset and accordingly the claim u/s. 54F was denied. Aggrieved by the order of Ld.AO, assessee preferred appeal before CIT(A).
It is submitted before the Ld.CIT(A), that the assessee has not submitted the details of Sale Deed dated 29.01.2015. The assessee submitted that no Sale Deed was executed on 29.01.2015 by or in favour of the assessee and that there has been a Gift of the property given out of natural love and affection by the assessee’s father to the assessee and her husband under a document titled as Release Deed executed by the father on 03.12.2014. The assessee submits that by virtue of the Gift Deed termed as Release Deed dated 03.12.2014 the assessee’s father gifted and renounced his undivided rights, interest in the property in favour of his daughter i.e., the assessee. The Ld.CIT(A) relying on the decision of Hon’ble Supreme Court in case of Dilip Kumar & Company reported in 95 taxmann.com 327 upheld that disallowance of the claim by the AO.
Aggrieved by the order of CIT(A), the assessee is in appeal before this Tribunal.
The Tribunal bench comprising Shri. Chandra Poojari, Accountant Member and Smt. Beena Pillai, Judicial Member said that:
In the present facts of the case, there is no dispute that assessee is the owner of the property, in respect of which the deduction is claimed. Tribunal observed that The passport to derive benefit under sec.54F(1) is investment in construction of property within the period required u/s 54(1)F or to invest in residential property within the stipulated time for enabling deduction under section 5 4F of the Act. Hon’ble Karnataka High Court in decision of CIT vs.Sambandam Udaykumar reported in 251 CTR 371 took the view that, under provisions of section 54F of the Act, the condition preceded is that, capital gains realised from sale of capital asset should have been parted by assessee and invested or constructed a residential house, as the case may be. Further on a plain reading of decision of Hon’ble Karnataka High Court in case of CIT Vs. Sambandam (Supra) reveals that, there is no particular stage of completion of construction, that is contemplated. Ld. AR submitted that, the construction was later on completed and the sale deed was registered in favour of assessee on 05/07/2019 in respect of transfer of ownership of residential property. There is nothing placed by revenue on record to demonstrate any other violation in support of their arguments.THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE
Court held that in present facts we are of the view that assessee has substantially fulfilled all necessary conditions to be entitled for liberal interpretation of sec.54F. Respectfully applying ration of Hon’ble Karnataka High Court in case of CIT Vs. Sambandam (Supra), we hold that assesse is eligible for exemption of Rs.65 lakhs u/s 54F.
In the result, the appeal filed by assessee stands allowed.