Case Law Details
Muthu Daniel Rajan Vs ACIT (ITAT Chennai)
ITAT Chennai held that benefit under section 54F of the Income Tax Act not deniable for technical lapse like non-registration of agreement to sale.
Facts- The assessment has been completed u/s.143(3) of the Act, on 30.03.2016 and determined total income of Rs.6,03,43,840/- by making additions towards disallowance of deduction u/s.54F of the Act, for Rs.2,60,54,377/-, disallowance of deduction u/s.24(b) of the Act, towards interest paid on housing loan on OMR property, on Besant Nagar property, and additions made under the head ‘short term capital gains’, towards brokerage & commission received amounting to Rs.62,94,736/-. The assessee carried the matter in appeal before the First Appellate Authority, and the Ld.CIT(A) for the reasons stated in their appellate order dated 07.03.2019, partly allowed appeal filed by the assessee, where he has deleted additions made towards disallowance of interest paid on housing loan u/s.24(b) of the Act, and also additions towards ‘short term capital gains’. However, sustained the additions made towards disallowance of deduction u/s.54F of the Act. Aggrieved by the order of the Ld.CIT(A), the assessee as well as the Revenue are in appeal before us.
Conclusion- In case, the assessee has satisfied conditions prescribed therein and invested sale consideration for purchase of residential house property, then even if some technical lapses like non-registration of agreement to sale, etc., does not disentitle assessee to claim benefit u/s.54F of the Act, in case, the assessee proves with evidences that finally he had registered the property in his favour. In this case, although, the agreement to sale was not registered, but the final Sale Deed executed in favour of purchaser, has been registered as required under the law. Therefore, in our considered view, when the assessee has filed evidences in the form of agreement to sale and if the agreement to sale date is considered, then the period of investment in new house property is less than one year before the date of sale of original asset and thus, in our considered view, the assessee is entitled for deduction u/s.54F of the Act.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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