Smt. Kempanna Shylaja Vs ITO (ITAT Bangalore)
Section 54F amendment restricting exemption to one residential house was prospective, applying only from April 1, 2015 and Violation of section 269SS of the IT Act, if any, would call for a separate penalty under section 271D, not an addition under section 68.
In the case of Smt. Kempanna Shylaja vs. Income Tax Officer (ITAT Bangalore), the appellant contested two primary issues: the disallowance of exemption under Section 54F of the Income Tax Act (ITA) and the addition under Section 68 of the ITA. Here’s a detailed summary:
Disallowance of Exemption under Section 54F
The appellant, along with her children, sold a vacant land in Bangalore North during the relevant assessment year and claimed exemption under Section 54F for a house property constructed in Hebbal, Bangalore. However, the exemption was disallowed by the Assessing Officer (AO) on the grounds that the appellant failed to provide evidence supporting the construction of a residential house and didn’t submit any documentary evidence.
On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] upheld the disallowance, stating that the appellant had built multiple residential units instead of a single residential unit. The units were also let out and not used by the appellant and her family, thus rejecting the exemption claim.
