Sapna Hemanshu Shah Vs DCIT (ITAT Bangalore)
The case concerns an appeal filed by Smt. Sapna Hemanshu Shah before the Income Tax Appellate Tribunal (ITAT), Bangalore, against the order of the National Faceless Appeal Centre (NFAC), New Delhi, dated 26 October 2023, relating to the assessment year 2013–14. The dispute focused solely on the disallowance of exemption under Section 54 of the Income Tax Act, 1961, concerning expenditure incurred on the interior decoration of a newly acquired residential house property.
Background of the Case
The assessee filed her return of income on 22 July 2013, declaring total income of Rs. 5,49,610. The case was selected for scrutiny, and statutory notices were issued. During the assessment proceedings, it was noted that the assessee had sold her residential house through a sale deed dated 15 January 2013 for Rs. 1,56,50,000. After deducting the indexed cost of acquisition, she computed long-term capital gains (LTCG) of Rs. 1,25,06,186.
- To claim exemption under Section 54, the assessee stated that she had:
- Given an advance of Rs. 54,65,641 for the purchase of a new residential plot, and
- Deposited Rs. 70,40,545 in the capital gains account.
- Based on these figures, the assessee claimed nil taxable capital gains.
Assessment Proceedings
