Ameetsingh Ajitsingh Rajpal Vs DCIT (ITAT Pune)
Farmhouse vs Residential House Dispute – Additional Evidence Admitted- Pune ITAT Remands 54F Claim
Assessee, engaged in real-estate business, filed return at Nil. Assessment u/s 143(3) resulted in additions including denial of deduction u/s 54F amounting to Rs.92,85,214/-. AO held that investment was not made in a “residential house” but in a farmhouse. CIT(A)/NFAC deleted additions relating to interest & unsecured loans u/s 68, but upheld the denial of 54F exemption.
Before Tribunal, Assessee argued that the authorities below erred in holding that a farmhouse cannot qualify as a residential house. It was contended that the investment was made within the prescribed period, the property was permissible under zoning regulations, & the Act contains no definition restricting “residential house”. Assessee filed an application under Rule 29 seeking admission of substantial additional evidence, now available, demonstrating the residential nature of the property.
Tribunal took note of the decision in CIT vs. Rajat Bhandari ITA No.4840/Delhi/2017 order dated 16.09.2021 wherein deduction u/s 54F was allowed wherein a farmhouse was constructed. Reliance was placed on certain other decisions including Girish Mohan, Shyamsunder Mukhija & Saroj Devi, where similar farmhouse-related 54/54F claims were allowed.
Tribunal observed that the additional evidence was crucial & had not been examined by the lower authorities. In the interest of justice, the issue relating to the denial of deduction u/s 54F was remanded to the AO. Tribunal directed AO to re-adjudicate the claim afresh in accordance with law, after granting due opportunity to Assessee & considering all materials, evidences & case laws filed. Assessee was also directed to fully cooperate during remand proceedings. Appeal was allowed for statistical purposes.
