Case Law Details
Simran Bagga Vs ACIT (ITAT Delhi)
Introduction: In a significant verdict, the Income Tax Appellate Tribunal (ITAT) Delhi, in the case of Simran Bagga Vs ACIT, has ruled on the eligibility of income tax deduction under section 54. The dispute arose when Simran Bagga, a non-resident individual residing in the UAE, claimed a deduction of INR 93,46,404 under section 54 for a property registered in her spouse’s name. The Assessing Officer (AO) disallowed the claim, leading to an appeal before the ITAT.
Detailed Analysis: Simran Bagga filed a revised return for A.Y. 2020-21, declaring a total income of Rs. 2,11,190 after claiming the deduction under section 54. The property in question, located in New Delhi, was sold for Rs. 1,30,00,000, and the Assessee invested Rs. 1,00,00,000 in a new residential house in Hyderabad. Notably, the new property was registered in the name of her spouse, Mr. Ajay Suri.
During the assessment, the AO disallowed the deduction, arguing that the property was not registered in Simran Bagga’s name, and the payment was made from a joint account. The Assessee contended that the deduction should not be restricted solely because the property was not registered in her name. The case reached the ITAT.
The ITAT considered the documentary evidence, including HDFC bank statements and payment receipts, establishing that the investment was made from the sale proceeds of the Delhi property. The Assessee explained that due to travel restrictions amid the COVID-19 pandemic, the property was registered in Mr. Ajay Suri’s name for convenience.
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