Shashidhar Nagam Vs ACIT (ITAT Hyderabad)
Six Flats, One Villa—Section 54 Gets a Second Hearing
The Hyderabad Tribunal set aside an appellate order dismissing an assessee’s appeal for non-prosecution, holding that the Commissioner (Appeals) had failed to decide the grounds on merits as required by section 250(6).
The dispute concerned denial of a section 54 exemption of ₹4,60,71,911 following the sale of six flats and purchase of a villa. The assessee maintained that an incorrectly worded submission describing him as engaged in real estate business had led to denial of the exemption, even though the Assessing Officer assessed the gains as long-term capital gains.
The Tribunal restored the matter to the Commissioner (Appeals), subject to payment of ₹5,000 as costs. The exemption itself was not allowed by the Tribunal; its eligibility remains open for fresh adjudication.
Six Flats Sold and a Villa Purchased
The assessee sold six flats during the relevant year and purchased a villa. He claimed exemption under section 54 in respect of the capital gains arising from the sale.
As recorded by the Tribunal, the assessee explained before the Commissioner (Appeals) that the acquisition cost of the villa exceeded the sale consideration. Nevertheless, the Assessing Officer denied the exemption and brought the capital gains to tax.
