Case Law Details
Sarita Gupta Vs PCIT (ITAT Delhi)
Introduction: The Income Tax Appellate Tribunal (ITAT) Delhi recently addressed a crucial case, Sarita Gupta Vs PCIT, where the revisionary order by the Principal Commissioner of Income Tax (PCIT) was contested. The central issue revolved around the denial of deduction u/s 54/54F based on non-deposit in the capital gains scheme account.
Detailed Analysis: The appellant, a resident individual, had sold an immovable property, prompting the Assessing Officer to reopen the assessment. The ITAT Delhi observed that the capital gain amount had been duly reinvested within the stipulated time under section 54(1). However, the PCIT, in a hyper-technical approach, challenged the assessment order, arguing that the capital gain amount was not deposited in the capital gain account scheme.
The tribunal scrutinized the assessment record and order-sheet entries, noting that the Assessing Officer had thoroughly examined the sale of the property and the resulting capital gain. The PCIT’s objection was solely based on the non-deposit in the capital gain account scheme, overlooking the compliance with section 54(1) conditions.
The ITAT emphasized that the PCIT’s hyper-technical viewpoint lacked substance, asserting that the basic conditions of section 54(1) had been fulfilled. It held that the taxpayer was entitled to claim the deduction under section 54, and no prejudice was caused to the revenue. Consequently, the exercise of power under section 263 was deemed invalid, and the order under section 263 was quashed, restoring the assessment order.
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