DCIT Vs Sandeep Hooda (ITAT Delhi)
No Deduction of Section 54 of income tax act 1961 if no basic amenities such as boundary wall, kitchen, wash room, bed room, electricity connection, water connection, etc
In the case of DCIT vs. Sandeep Hooda, adjudicated by ITAT Delhi, the eligibility of a taxpayer for deduction under Section 54 of the Income Tax Act, 1961, is scrutinized. The dispute arises from the absence of essential amenities in the claimed residential property.
The crux of the matter lies in whether the taxpayer, Sandeep Hooda, qualifies for deduction under Section 54 despite the lack of basic amenities like boundary walls, kitchen, washroom, electricity, and water connections in the purported residential property. The Revenue contends that the absence of these amenities disqualifies Hooda from availing the deduction.
The Assessing Officer (AO) raised pertinent questions regarding the nature and status of the property claimed by Hooda for deduction. The AO’s scrutiny revealed that the property lacked essential amenities and failed to meet the criteria set forth in Section 54 of the Income Tax Act. Despite being given multiple opportunities to provide supporting evidence, Hooda failed to demonstrate compliance with statutory requirements.
A physical inspection conducted by the Inspector and Office Superintendent further corroborated the absence of basic amenities on the property. The makeshift structures found on the land, including plywood rooms with attached toilets and makeshift kitchen arrangements, fell short of the standards expected for a residential dwelling. The lack of electricity and water connections, along with the absence of a permanent boundary wall, reinforced the AO’s decision to deny the deduction.
