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Case Law Details

Case Name : Kusumben Amritlal Sanghavi Vs DCIT (ITAT Rajkot)
Appeal Number : I.T.A. No. 194/Rjt/2019
Date of Judgement/Order : 30/05/2023
Related Assessment Year : 2015-16
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Kusumben Amritlal Sanghavi Vs DCIT (ITAT Rajkot)

The appellant, Kusumben Amritlal Sanghavi, filed a revised return of income to claim a deduction of Rs.10,53,975/- under section 54F on account of the purchase of a residential building. However, the assessee’s claim was rejected by the Revenue as she failed to deposit the unutilized amount into the capital gain scheme before the due date of filing return of income under section 139(1) of the Act.

To defend her case, the appellant relied on several judgements, primarily the decision of the Hon’ble Karnataka High Court in the case of CIT vs. K. Ramachandra Rao. This ruling suggested that if the investment in the residential property is made within the time limit of section 139(4), the deduction under section 54F should be allowable.

Upon reviewing the case and various judgments, ITAT Rajkot found that the assessee’s situation is covered by the ratio laid down by the Hon’ble Karnataka High Court in the case of CIT v. K. Ramachandra Rao. It held that if the assessee has purchased a new residential house within the due date specified under Section 139(4) of the Act, the requirement to deposit net consideration in the capital gain account scheme as per Section 54F(4) would not be attracted.

Conclusion: The judgment delivered by ITAT Rajkot in Kusumben Amritlal Sanghavi Vs DCIT offers crucial guidance on the importance of timing in filing revised returns for claiming deductions under section 54F. It underlines the principle that the purchase of new residential property within the time limit of Section 139(4) allows the assessee to claim the deduction, a significant point of consideration for tax practitioners and individuals alike.

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