Sundararaman Narayanan Vs DCIT (ITAT Chennai)
The appeal before the Income Tax Appellate Tribunal (ITAT), Chennai, relates to the assessment year 2015–16 and arises from the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 11.11.2025. The assessee, an individual, had filed his return declaring total income of Rs. 24,31,780/- and claimed a refund. The capital gains in question arose from the sale of a residential property standing in the name of the assessee’s wife, for a consideration of Rs. 75,00,000/-. The assessee computed capital gains and claimed exemption under section 54F of the Income-tax Act.
During processing under section 143(1), the Central Processing Centre allowed TDS credit only to the extent of Rs. 85,012/- relating to the assessee’s PAN, while denying credit of Rs. 1,66,619/- pertaining to the PAN of the assessee’s wife. Subsequent applications under sections 154 and 264 were rejected. Thereafter, reassessment proceedings were initiated under section 147 by issuing notice under section 148 to examine the exemption claimed under section 54F.
In reassessment, the Assessing Officer (AO) disallowed the exemption under section 54F on the grounds that the transferred asset was a residential house, and therefore outside the purview of section 54F, and also due to lack of supporting evidence. The AO made the addition on a protective basis, indicating uncertainty regarding the correct person in whose hands the income should be assessed.
