Ranjan Sen Jain Vs ITO (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal (ITAT) arose from the order of the Commissioner of Income Tax (Appeals) affirming the assessment made under Sections 143(3) read with 144B of the Income-tax Act, 1961 for Assessment Year 2020-21. The dispute related to computation of long-term capital gains, determination of the fair market value (FMV) of inherited property as on 01.04.2001, and the scope of exemption under Section 54 in respect of a redeveloped residential property.
The assessee inherited a residential property at Vasant Vihar, New Delhi from his mother in 1997. After converting it into freehold, he entered into a collaboration agreement in 1999 with a developer under which the first floor was allotted to the builder while other portions remained with him. Subsequently, in 2018, the assessee and the owners of the first-floor units entered into another collaboration agreement with M/s Uppal Housing Pvt. Ltd. for demolition and reconstruction of the property. Under the agreement, the assessee was to receive the basement, ground floor, third floor and terrace, while the builder was allotted the second floor and also paid ₹75 lakh as part of the consideration. The assessee claimed exemption under Sections 54/54F on the entire portion received after redevelopment.
