[2021] 124 taxmann.com 201 (Bangalore – Trib.)

 

IN THE ITAT BANGALORE BENCH ‘C’

 

Short Overview:

 

Section 54, read with sections 54F and 263, of the Income-tax Act, 1961

 

Capital gains

 

Profit on sale of property used for residence (Section 54 v. section 54F)

 

Assessment year 2013-14

 

Assessee declared long-term capital gain on sale of property and claimed deduction under section 54F which was allowed by Assessing Officer

 

However, Commissioner observed that assessee owned more than one residential house other than new asset on date of transfer of original asset

 

 

He set aside orders of Assessing Officer allowing deduction under section 54F

 

In assessment order, there was a reference to examination of claim under section 54 but it was not clear what enquiries were made by Assessing Officer

 

From description of property in sale deed, it appeared that there was a house

 

However, issue as to whether same could be said to be a residential house for purpose of section 54, was a matter that required examination

 

Issue was Whether since there was a failure on part of Assessing Officer to make necessary enquiry, Commissioner was justified in invoking jurisdiction under section 263 for remanding order for de novo consideration

 

Held, yes

 

Another issue was whether even if deduction claimed in return was under section 54F, claim of assessee should be considered under provision of section 54 if same was meant as one made under section 54

 

Held, yes

 

Conclusions :

 

Where assessee claimed in return deduction under section 54F but on date of transfer of original asset more than one residential house was owned by him and claim of deduction actually meant for deduction under section 54, deduction would be allowable under section 54

 

Sec. 54 exemption couldn’t be denied if assessee claimed exemption under wrong section