The Income Tax Appellate Tribunal, Ahmedabad upheld the Assessee’s claim within the Period of 3 years from the sale of land.
The bench observed that the only issue involved in the case is deduction of Rs.75,80,923/- claimed under Section 54F of the Income Tax Act, 1961.
The tribunal noted that the AO had disallowed the claim for the reason that the construction of the house was not completed within the period of 3 years from the date of transfer of the original asset, on which the capital gain was derived by the assessee.
The bench further noted that in the statement of facts filed before the CIT(A), the assessee had explained that a sum of Rs.35 Lacs was deposited on 22.07.2016 in UBI Capital Gain Account. Further, a plot of land was purchased on 17.02.2016 for a total consideration of Rs.42,51,220/- for construction of residential house. The assessee had started the construction on the said plot and expenditure of Rs.36,63,350/- was already incurred by the assessee towards this construction till 05.11.2018. Therefore, the assessee had rightly claimed deduction of Rs.79,63,061/- (Rs.42,51,220/- + Rs.37,11,841/-) i.e. within the period of 3 years from the sale of land.
The tribunal found that the CIT(A) had not considered the submissions of the assessee in the statement of facts and had merely dismissed the appeal of the assessee due to non-compliance.
The bench stated that the provision of Section 250(6) of the Act requires the CIT(A) to dispose of the matter in writing and with reasons on the point of dispute raised by the assessee.
The bench set aside the matter back to the file of the CIT(A) with a direction to decide the appeal on merits by giving another opportunity to the assessee.
Sanjay R. Shah, AR of the assessee explained that the CIT(A) had confirmed the order of the AO in limine without considering the details furnished by the assessee in the statement of facts attached in Form No.35 of the appeal memo.
He submitted that the CIT(A) was not correct in dismissing the appeal of the assessee without examining the merits of the case.
Case Information
Case Name: Bhupendrabhai Punjabhai Patel V/S Assistant Commissioner of Income Tax
Judicial Level & Location : ITAT, Ahmedabad
Appeal Number : I.T.A. No. 655/Ahd/2024
Date of Ruling : 26/07/2024
Ruling in favor of: Appellant
Judges: Ms. Suchitra Raghunath Kamble, Judicial Member & Narendra Prasad Sinha, Accountant Member
