Smt. Lekha Reddy Mettu Vs ACIT (ITAT Hyderabad)
In the case of Smt. Lekha Reddy Mettu vs. ACIT (ITAT Hyderabad), the Tribunal addressed appeals filed against the assessment orders for the Assessment Year 2017-18. The case arose from a property transaction where the assessee, a non-resident individual, was part of a Joint Development Agreement (JDA) involving 46 owners for land development and sale. Based on the JDA, the assessee’s share of the deemed sale consideration was calculated at ₹64,57,000 under Section 50C of the Income Tax Act, 1961. The income was not declared in the tax return, leading to a reassessment by the Assessing Officer (AO) and denial of exemptions claimed under Section 54F.
The primary issue revolved around the non-fulfillment of conditions under Section 54F, which requires the construction of a residential property within three years of transfer. While the assessee argued that construction delays were caused by disputes among the developer’s partners, the Tribunal noted that the disputes arose well beyond the statutory timeline and that the assessee had not taken adequate steps to enforce her rights. Consequently, the Tribunal upheld the AO’s decision to deny the exemption and dismissed the appeals, citing the lack of compliance with statutory provisions and insufficient evidence to support the assessee’s claims.
