Ramdas Sitaram Patil, Kolhapur vs. Assistant Commissioner of Income-Tax - (Income Tax Appellate Tribunal) (07 Aug 2024)

There is no bar under law to claim deduction simultaneously under Section 54 and Section 54F of IT Act in respect of the same asset

MANU/IP/0189/2024

Direct Taxation

The Appellant is an individual, filed the Return of Income for the A.Y. 2016-17 on 07.03.2017 declaring total income of Rs.96,55,810. Against the said return of income, the assessment was completed by the Assessing Officer (AO) vide order passed under Section 143(3) of the Act at a total income of Rs.2,59,13,610. While doing so, the AO disallowed the claim for deduction of income. The solitary issue in the present appeal revolves round the entitlement of assessee for deduction under Section 54 and 54F of the Income-tax Act, 1961 (IT Act).

From the perusal of the assessment order, it would reveal that the AO had denied the claim for deduction under Section 54 and 54F, firstly on the ground that no deduction can be claimed simultaneously in respect of the new residential house and secondly, the new residential property was purchased before one year prior to the sale of original asset.

Admittedly, the sale consideration was paid prior to the one year before the sale of original asset. There is no bar under law to claim deduction simultaneously Section 54 and Section 54F in respect of the same asset. The crucial fact which needs to be determined in the present case is the date of purchase of the new residential property. It is settled position of law that the crucial date for the purpose of determination is when the property is purchased for the purpose of Section 54 and the date when the possession and control of the property is given to the purchaser's hands.

The recital of the sale deed clearly says that possession of the property was taken on 31st March, 2015 which is within the period of one year before the date of sale of original asset. The covenants in the sale deed executed and registered are conclusive in the absence of any evidence to the contrary. The finding of the learned CIT(A) that it is a fabricated document is a mere bald allegation and cannot be sustained in the eyes of law. The appellant is entitled for deduction under Section 54/54F as claimed by the assessee. Appeal of the assessee is allowed.

Tags : ASSESSMENT DEDUCTION ENTITLEMENT