The Income Tax Appellate Tribunal, Chennai, allowed the Income Tax deduction U/s 54F on construction of new residential unit.
The tribunal noted that during the year under consideration, the assessee had sold the land at Noombal Village, for a consideration of Rs.78,48,000/- and admitted LTCG and claimed deduction u/s.54F of the Act to the tune of Rs.57,41,274/- on the investment of Rs.70,53,806/- made in the new constructed house.
The bench opined that the assessee had discharged the burden to prove construction of a residential house/dwelling unit (first floor with separate stair-case, kitchen, new electrical connection, water connection, etc.) and it is not disputed that construction of the new dwelling/residential unit was within the time stipulated u/s.54F of the Act.
It was held that the assessee is eligible for claiming deduction u/s.54F of the Act and therefore, it set aside the order of the CIT(A) and directed the AO to grant deduction claimed u/s.54F of the Act. Â
The tribunal further noted that assessee had discharged the burden to prove that an amount of Rs.57 lakhs was in his hands, which was received from his family members in the relevant year under consideration, apart from the amount of Rs 78,48.000/- received and further, it was noted that assessee had withdrawn an amount of Rs.13.90 lakhs.
Therefore, bench observed that the assessee succeeded in proving the nature and source of Rs 59.90 lakhs, and therefore, addition made of Rs.59.90 lakhs was not warranted. In such an event, no addition u/s.68 of the Act is sustainable and directed to be deleted.
Facts
The assessee filed return of income (RoI) for AY 2012-13 declaring total income of Rs.31,70,459/-. The income of the assessee consists of salary of Rs.29,62,540/-, income fromother sources Rs.18,520/- and Long Term Capital Gain of Rs.4,14,479/- and losses of current year at Rs.1,25,080/- and after claiming deduction under Chapter–VIA of Rs.1 lakh, the total income was arrived at Rs.31,70,459/-. Later, the RoI was selected for scrutiny under CASS, and the AO completed the assessment. The AO assessed the total income of the assessee at Rs.1,54,19,580/- as against the returned income of Rs.31,70,459/-.
The AO noted that the assessee had constructed a house (first floor) in the relevant Assessment Year before the transfer of property in February, 2012 and therefore, he asked the assessee to prove source of the funds for the construction of the first floor, because, the transfer of the property at Noombal Village, was an event after the commencement of the construction.
In order to prove the nature & source of the money, the assessee contended (i) the sale consideration of Rs.78,48,000/- was received on 21st October, 2011 (‘4’ months before the Sale Deed was executed on 29.02.2012 and (ii) that he received Rs.59,90,000/- from his father/mother/brothers & sisters. In this regard, the assessee explained that he had executed on stamp paper an agreement for purchase of land on 25.07.2007 from his father late Mr. C. Krishnama Naidu (vendor) for a consideration of Rs.75 lakhs which was paid through cheque/cash, wherein, the details of cheques and payments in cash are given.
Conclusion
The appeal filed by the assessee was allowed.
Case Details
Case Name: Shri Chandra Bhavani Sankar V/S The ITO
Citation: ITA No.101/Chny/2024
Court: ITAT Chennai
Judge: Shri Aby T. Varkey, Judicial Member And Shri Amitabh Shukla, Accountant Member
Decision Date: 09/08/2024
