ITO Vs Varun Jaisingh Asher (ITAT Mumbai)
The appeal before the ITAT Mumbai was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 16.09.2025 for Assessment Year 2020–21. The dispute originated from the assessment order passed under Sections 143(3) read with 144B of the Income Tax Act on 28.09.2022.
The assessee, an individual engaged in business as a commission agent in chemical distribution, had declared total income of Rs. 4,87,280/- and claimed exemption under Section 54F amounting to Rs. 11,68,89,000/-. The exemption was claimed in respect of surrender of tenancy rights, pursuant to which the assessee received a residential flat in a redeveloped property.
The Assessing Officer (AO) found that the assessee received Rs. 11,68,99,000/- in connection with surrender of tenancy rights in a property jointly occupied by the assessee and his brother. The property had earlier been vacated by an old tenant in 2013 upon payment of consideration. Thereafter, the assessee and his brother began occupying the premises, paying monthly rent of Rs. 5,000 each. Although no formal agreement was initially executed, tenancy was evidenced through rent receipts and electricity bills. A formal tenancy agreement was later registered on 05.08.2014 in connection with redevelopment of the property.
