Gurkanwal Kaur Vs ITO (ITAT Chandigarh)
Capital Gains Addition Deleted Because Procedural Lapse Cannot Override Genuine Section 54F Claim; Section 54F Benefit Cannot Be Denied Solely for Non-Deposit in Capital Gain Account Scheme; ITAT Grants Section 54F Relief Because Revenue Could Not Disprove Residential Investment Evidence; Beneficial Provision Under Section 54F Must Be Liberally Interpreted, Rules ITAT.
Summary: The ITAT Chandigarh allowed the assessee’s appeal and held that exemption under Section 54F of the Income Tax Act cannot be denied merely because the unutilised capital gains were not deposited in the Capital Gain Account Scheme before the due date under Section 139(1), when the entire capital gain had ultimately been invested in a residential house within the prescribed statutory period. The Assessing Officer had restricted the deduction and made an addition of ₹87.08 lakh on the ground that only part payment for the new property was made before the due date and certain discrepancies allegedly existed regarding the flat details and possession. However, the Tribunal accepted authenticated documents produced by the assessee explaining the discrepancies and observed that the Revenue failed to rebut the evidence. The Tribunal held that Section 54F is a beneficial provision requiring liberal interpretation and that substantive compliance through actual investment cannot be defeated by procedural or technical lapses relating to deposit requirements.
