Charly Rocky Chitteth Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, adjudicated an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals) dated 22.09.2025 for Assessment Year 2016–17. The dispute concerned the disallowance of exemption claimed under Section 54 of the Income Tax Act and the consequent addition of ₹34,55,915 as long-term capital gains.
The assessee challenged the action of the Assessing Officer (AO) and the CIT(A), contending that the deduction under Section 54 had been wrongly denied without proper consideration of facts and legal provisions. It was argued that the authorities erred in treating the date of registration of the new property as the relevant date for determining eligibility under Section 54, instead of considering the date of possession and handover. The assessee submitted that the final payment for the new property was made on 06.02.2016 and possession was handed over on 14.04.2017, which fell within the prescribed time limit under Section 54.
The facts show that the assessee had agreed to purchase an under-construction flat in November 2014 and made payments totaling ₹38,87,600 between March 2015 and February 2016. The assessee sold an immovable property on 13.01.2016 for ₹49,80,000, resulting in a long-term capital gain of ₹34,55,915. This gain was invested in the purchase of a new residential flat, and exemption under Section 54 was claimed.
