ITO Vs Narasimha Reddy Duthala (ITAT Hyderabad)
ITAT Hyderabad held that denial of exemption under section 54F on allegation of more than one residential house unwarranted as one residential house is gifted to his daughter. Accordingly, exemption allowed and appeal of revenue dismissed.
Facts- AO rejected exemption claimed by the assessee under section 54F of the Act on three grounds including having more than one residential house as on the date of transfer of original asset i.e., shares of companies and further, no investment was made in capital gain account on or before the due date provided under section 139(1) of the Act and further, investing capital gain amount only in purchase of land and constructing residential house in less than 6% of land area.
CIT(A) allowed the appeal. Being aggrieved, the present appeal is filed by the revenue.
Conclusion- Held that, the said facts does not alter the fact with regard to entitlement of the assessee for claiming exemption u/sec.54F of the Act. Thus, we reject the arguments of the Learned DR. Therefore, we are of the considered view that, once the Gift given by the assessee is considered as valid Gift, then, the assessee is left with only one residential house property as on the date of transfer of original asset dated 16.06.2021 and, therefore, the assessee satisfied the condition of proviso below to sub-sec.(1) of sec.54F of the Act and eligible for exemption u/sec.54F of the Act.
