ITAT allowed capital gain exemption u/s 54F – Where father died intestate, inherited property devolved equally on mother and son
Where father died intestate, inherited property devolved equally on mother and son. With this observation, ITAT allowed full Section 54F exemption for reinvestment in residential houses purchased in both names of father and son. .
In this case, Assessee claimed full exemption under Section 54F for reinvesting the proceeds in two residential properties-one in his own name and the other in his mother’s-the AO denied part of the exemption and made additions of over ₹7.8 crores.
The Tribunal acknowledged the assessee’s adoption of ₹200/sq. yd. as the fair market value (based on a Supreme Court ruling) and moderated it to ₹150/sq. yd., allowing partial relief. But the real turning point came when the Tribunal recognized that the father had died intestate, and under Section 20 of the Hindu Succession Act, the land devolved equally upon the mother and the son-even though the sale deed bore only the son’s name.
Calling it “a peculiar case,” the ITAT appreciated the transparency, good faith, and the act of indirectly partitioning the property by reinvesting in a house for the mother.
With this, full relief under Section 54F and deletion of the penalty under Section 271(1)(c) was ordered.
The Copy Of the order is as under:
