Raunaq Prakash Jain Vs ITO (ITAT Jodhpur)
In the case of Raunaq Prakash Jain vs. ITO, the ITAT Jodhpur addressed the taxation of cryptocurrency gains for the assessment year 2021-22. The appellant, Raunaq Prakash Jain, had reported gains from Bitcoin sales as long-term capital gains (LTCG) and claimed deductions under Section 54F of the Income Tax Act. However, the assessing officer (AO) contested the classification, arguing that Bitcoin was not a “capital asset” under Section 2(14) for the relevant period and taxed the gains as “income from other sources.” The AO also denied the Section 54F deduction of ₹4.95 crore, which was claimed against the LTCG from the sale.
The ITAT Jodhpur, after reviewing the case, concluded that Bitcoin held for over 36 months qualifies as a “capital asset” under the Income Tax Act. It ruled that the gains should be taxed as LTCG, as the relevant provisions defining virtual digital assets came into effect only from April 2022. Consequently, the tribunal directed the AO to allow the deduction under Section 54F, considering the gains as LTCG. The appeal was thus decided in favor of the assessee, reinforcing the principle that taxpayers should benefit from provisions in cases of interpretational ambiguity.
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