Romaben Keyur Thakore Vs DCIT (ITAT Ahmedabad)
The ITAT Ahmedabad adjudicated an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals), which had upheld disallowance of deduction under Section 54F of the Income Tax Act in reassessment proceedings for Assessment Year 2015–16. The assessee had originally filed a return declaring income and claimed deduction under Section 54F arising from sale of an immovable property. The property was sold on 19.08.2014, generating long-term capital gains. The assessee had invested the sale consideration in an under-construction residential property and paid substantial amounts towards it prior to filing the return.
The Assessing Officer reopened the assessment and disallowed the deduction of ₹79,07,696 on the ground that the assessee had purchased the new property beyond the prescribed time limit of two years from the date of sale, as the purchase deed and possession were completed on 26.04.2017. The Commissioner (Appeals) confirmed the disallowance, observing that the statutory conditions of Section 54F were not fulfilled since neither possession nor execution of sale deed occurred within the stipulated period.
Before the Tribunal, the assessee contended that the investment was made in an under-construction property, which should be treated as “construction” rather than “purchase,” thereby allowing a three-year time limit under Section 54F. It was submitted that the entire sale consideration was paid between February and May 2014, and documentary evidence including builder confirmations and payment details was furnished. The assessee relied on judicial precedents to support the claim.
