Sudhakar Reddy Mettu. Vs ACIT (Telangana High Court)
The appeal under Section 260A of the Income-tax Act, 1961 challenged the order of the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, dated 29.05.2024, which had upheld the Assessing Officer’s decision denying the assessee exemption under Section 54F.
The assessee, a non-resident individual, had not filed a return for AY 2017-18. Based on information relating to an immovable property transaction, the Assessing Officer found that the assessee, along with 45 others, had entered into a Development Agreement-cum-General Power of Attorney (DAGPA) dated 31.05.2016 for development and sale of land measuring 4.505 acres in Survey No. 14, Guttala Begumpet Village, Serlingampally Mandal, Rangareddy District. The total sale consideration under the DAGPA was ₹43,61,20,000, against an SRO value of ₹62,86,20,000. The owners’ share was 47.25% and the developers’ share was 52.75%. As one of the 46 owners, the assessee’s share in the deemed sale consideration under Section 50C for computation of long-term capital gains was ₹64,57,000.
The Assessing Officer reopened the assessment by issuing notice under Section 148, stating that income chargeable to tax had escaped assessment. During assessment proceedings, notices under Section 142(1) and a show-cause notice were issued. The assessee accepted the deemed sale consideration at ₹50,00,000, claimed indexed cost of acquisition of ₹5,28,000, and sought exemption under Section 54F.
