Rajesh Narendrabhai Patel Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, considered an appeal arising from an order of the Commissioner of Income Tax (Appeals), NFAC, for Assessment Year 2012–13. The case originated from reassessment proceedings under sections 143(3) read with 147 of the Income-tax Act. The assessee, an individual, had not originally filed a return but later filed one in response to a notice under section 148, declaring income including house property income and nil capital gains after claiming indexed cost.
During assessment, the Assessing Officer noted that the assessee had sold an immovable property for ₹90 lakh, whereas the jantri value was significantly higher. The matter was referred to the Valuation Officer, who determined a higher value, leading to recomputation of long-term capital gains at ₹62.60 lakh after restricting indexed cost. The Assessing Officer also disallowed deduction under section 54 claimed on investment in a residential property purchased in the name of the assessee’s wife, holding that the property was not purchased in the assessee’s own name. Additionally, interest income not disclosed was added. The total assessed income was computed at ₹78.75 lakh.
On appeal, the CIT(A) upheld the disallowance of deduction under section 54, relying on strict interpretation of exemption provisions and holding that the benefit is available only when the property is purchased in the assessee’s own name. The appeal was dismissed.
