Raj Krishan Gupta Vs ACIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, partly allowed the assessee’s appeal against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2015-16. The appeal involved denial of deduction under Sections 54/54F, addition under Section 56(2)(vii), and disallowance of indexed cost of acquisition.
The assessee had filed his return declaring income of ₹91.58 lakh. The case was selected for limited scrutiny due to a mismatch relating to capital gains on the sale of land or building and increase in capital. During assessment, the Assessing Officer (AO) made an addition under Section 50C, disallowed the exemption claimed under Sections 54/54F amounting to ₹88.41 lakh, made an addition of ₹24 lakh under Section 56(2)(vii), and disallowed portions of the indexed cost of acquisition relating to two properties. The Commissioner (Appeals) upheld these additions.
The principal dispute concerned the deduction under Sections 54/54F claimed on the sale of property at M-21, Greater Kailash Part II, New Delhi. The AO denied the deduction on the ground that the sale deed described the property as “commercial” and that the assessee owned more than one residential house, thereby making him ineligible for exemption under Section 54F.
