Kethsial Justin Vs ITO (ITAT Chennai)
In the case of Kethsial Justin Vs ITO, the Income Tax Appellate Tribunal (ITAT) Chennai allowed the assessee’s appeal for a deduction of ₹30,03,000 under Section 54F of the Income Tax Act, 1961. The assessee, who is the Managing Director of Eden Leather Manufacturing & Exports Pvt. Ltd., had claimed this deduction for the capital gains from the sale of a property, which she reinvested in constructing a new floor on her existing residential house. Both the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] had denied the deduction, arguing that the construction was merely an extension of the existing building and did not constitute a new residential house as required under Section 54F. The ITAT, however, found that the new floor was an independent dwelling unit with a separate kitchen, staircase, and utilities, distinguishing it from a mere extension. The Tribunal relied on various pieces of evidence, including property tax records and utility connections, to conclude that the construction was indeed a new residential unit. Consequently, the ITAT overturned the lower authorities’ decisions and directed the AO to grant the deduction to the assessee. The appeal was thus allowed in favor of the assessee. Also Read; Construction of new dwelling unit eligible for Section 54F deduction: ITAT Chennai
