Case Law Details
Sunil Amritlal Shah Vs ITO (IT) (ITAT Mumbai)
Appeals Overview: Both Mr. Sunil A Shah (ITA No. 4069/M/2023) and Mrs. Rita Sunil Shah (ITA No. 4070/M/2023), spouses, filed appeals against the assessment orders passed on October 3, 2023. These orders denied their claims for exemption under Section 54 of the Income Tax Act, 1961, determining the total income of each appellant at ₹3,597,395.Both assessment orders were nearly identical, leading to a consolidated hearing and decision.
Property Transactions: The appellants sold a jointly owned flat (Flat No. 1802, Fiona, Hiranandani Estate, Ghodbunder Road, Thane) on February 10, 2011, for ₹138 lakhs, realizing a long-term capital gain. They each reported 50% of the sale proceeds. They sought deduction under Section 54, claiming the purchase of a new residential flat (Flat No. 1501, Tower No. 7, Orchard Residency, LBS Marg, Ghatkopar (W), Mumbai) for ₹73,06,530 as their qualifying investment.
Legal Issues and Contentions
Dispute on Date of Acquisition: The Assessing Officer (AO) determined the purchase date of the new property as July 25, 2009, based on the agreement for sale. This date was outside the permissible one-year period before the sale of the original property. The appellants argued that the relevant date should be February 2, 2011, when they took possession of the new property, which falls within the permissible period under Section 54.
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