Case Law Details
Pyare Lal Saini Vs ITO (ITAT Jaipur)
The issue under consideration is whether AO is correct in rejecting the claim of assessee regarding the deduction u/s 54F, which was made first time during Reassessment Proceedings?
In the present case, the assessee is a farmer, he could not file his income tax returns. Upon receiving a notice u/s 148 from the income tax department, he filed the return and claimed deduction under 54F of the Act towards the sale of the capital asset sold by the assessee as a co-owner of the property. However, the Assessing Officer denied the benefit of section 54F to the assessee.
ITAT states that, the assessee at the time of filing of the appeal before the ld. CIT(A) has specifically raised an issued of claiming of deduction U/s 54F of the Act and claimed that the sale consideration has been used for construction of new residential house which is eligible for deduction U/s 54F of the Act. Having regard to the facts and circumstances, where the assessee is a farmer and a senior citizen, the claim of deduction U/s 54F of the Act cannot be denied without verification of the fact of utilization of the sale consideration for construction of the house. Since it is a case of non-filing of return of income and the A.O. has issued notice U/s 148 of the Act for assessing the capital gain in the hands of the assessee, therefore, there is no bar in claiming the deduction U/s 54F of the Act against the capital gain proposed to be taxed by the A.O. in the proceedings U/s 147 of the Act. Hence, the issue of deduction U/s 54F of the Act is required to be considered and decided after considering the facts of utilization of sale proceed in construction of new residential house. Therefore, in the substantial interest of justice, ITAT set aside the matter back to the record of the A.O. for deciding the same afresh after giving due and reasonable opportunity of hearing of the assessee.
Hence, appeal of the assessee is allowed.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
