Dollar Chunilal Modi HUF Vs ITO (ITAT Mumbai)
Section 54F Claim Can Be Raised in Appeal: ITAT Mumbai Restores Exemption Claim on Sale of Depreciable Asset
The Mumbai ITAT (SMC Bench) allowed the assessee’s appeal for statistical purposes for AY 2013-14, holding that a Section 54F exemption claim cannot be rejected merely because it was not made in the original return. The AO had taxed ₹25.59 lakh as short-term capital gains under Section 50 on sale of a depreciable asset and denied Section 54F relief on the ground that the claim was not made in the return and documentary evidence was insufficient. The CIT(A) affirmed the denial.
Relying on Goetze (India) Ltd. (SC), the Tribunal clarified that while an AO cannot entertain a fresh claim without a revised return, appellate authorities are empowered to consider such claims. The ITAT further noted binding precedents (Ace Builders (Bom HC) and V.S. Dempo (SC)) that Sections 54/54F relief is available even for capital gains arising from depreciable assets, subject to satisfaction of statutory conditions. As those factual conditions (timing, quantum, nature of investment, compliance) were not verified, the matter was remanded to the AO for de novo examination after granting opportunity. The appeal was accordingly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
