Ratan Mahendra Jain Vs ITO (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT) Mumbai Bench has ruled in favor of the assessee, Ratan Mahendra Jain, allowing the claim for exemption under Section 54F of the Income Tax Act, 1961. The Tribunal clarified that the assessee’s purchase of an interconnected duplex unit should be considered as a single residential property, not two separate flats, thus qualifying for the exemption from long-term capital gains.
The appeal was filed by the assessee against an order dated February 5, 2025, by the National Faceless Appeal Centre (NFAC), Delhi, which had confirmed the disallowance of Rs. 16,33,83,660/- claimed as exemption under Section 54F for Assessment Year 2022-23.
Background of the Case
Ratan Mahendra Jain, an individual assessee, filed her return of income on July 26, 2022. During the assessment year, she purchased a residential property described as a duplex, comprising units 501 and 601, through a single deed of transfer. She subsequently claimed this purchase as exempt under Section 54F, which provides for exemption of long-term capital gains if the net consideration from the transfer of any long-term capital asset (other than a residential house) is invested in the purchase or construction of a new residential house within specified timeframes.
