Case Law Details
Surendra Babu Vs DCIT (ITAT Hyderabad)
ITAT Hyderabad held that benefit of deduction under section 54F not eligible as the assessee owns more than one residential property on the date of transfer of the capital asset other than the new asset acquired.
Facts- The Pr. CIT initiated proceedings u/s 263 of the I.T. Act on the ground that AO has allowed the claim of deduction u/s 54F without proper verification of the facts in the wake of assessee’s contention that some of the properties were given on rent and hence commercial in nature.
Accordingly, AO asked the assessee to explain as to why deduction claimed u/s 54F should not be disallowed, since the assessee owns more than one residential house other than the new assets.
AO held that the properties at S.No.2 to 6 fall under the category of residential houses and therefore, the case of the assessee is hit by proviso (a)(i) of section 54F of the I.T. Act. He therefore, disallowed the claim of deduction u/s 54F at Rs. 9,54,10,035/-and determined the taxable income at Rs.31,92,00,995/- and agricultural income of Rs.6,53,800/-.
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