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2018 (12) TMI 1259 - AT - Income TaxEligible for exemption u/s 54F - denial of claim as assessee was having more than one residential house - Held that - As on the date of transfer of the original asset i.e. on 16.7.2012 and 12.9.2012, the assessee was only owner of half portion of the house, which was in joint ownership. Therefore, the A.O. was not correct to decline benefit of section 54F(1) of the Act on this basis. However, Ld. CIT(A declined benefit of section 54F(1) of the Act on the basis that subsequent to transfer of original assets, the assessee had purchased two new assets. It is clearly contrary to the proviso (a)(ii) to section 54(F)(1) of the Act. Since the Ld. CIT(A) rejected the claim on the ground other than the ground taken by the A.O., he ought to have given a specific notice to the assessee in this regard. Therefore, we set aside the orders of the authorities below and restore the issue to the file of the assessing officer to decide it afresh - Appeal filed by the assessee is allowed for statistical purposes.
Issues Involved:
1. Rejection of deduction claimed under section 54F of the Income Tax Act. Detailed Analysis: Issue 1: Rejection of deduction claimed under section 54F of the Income Tax Act The appellant's appeal was directed against the order of the CIT(A)-I, Indore regarding the assessment year 2013-14. The appellant claimed deduction under section 54F of the Act, arguing that owning one residential house on the date of original asset transfer made them eligible for exemption. The Assessing Officer (A.O.) observed that the appellant had sold plots and purchased residential houses, leading to the denial of the claimed deduction. The CIT(A) dismissed the appeal, prompting the appellant to appeal further. The appellant contended that the A.O. and CIT(A) incorrectly interpreted the facts and judicial precedents. The A.O. disallowed the deduction under section 54F due to the appellant owning multiple residential houses at the time of purchasing a new house. The appellant's counsel argued that the authorities failed to consider the facts and relevant legal precedents. Analysis: The relevant provision of section 54F of the Act specifies conditions for claiming deductions related to the purchase of residential property. The section outlines situations where the deduction is not applicable, such as owning more than one residential house at the time of original asset transfer. The A.O. and CIT(A) based their decisions on the appellant owning multiple residential properties when purchasing new assets, leading to the denial of the deduction. However, the appellate tribunal found discrepancies in the authorities' reasoning. The tribunal noted that the appellant was the owner of only half of a jointly-owned house at the time of the original asset transfer, which did not disqualify them from claiming the deduction under section 54F. The CIT(A)'s rejection of the claim on different grounds without specific notice to the appellant was deemed incorrect. Consequently, the tribunal set aside the lower authorities' orders and remanded the issue to the A.O. for a fresh decision considering all relevant facts and legal precedents. The appeal was allowed for statistical purposes. This detailed analysis highlights the appellant's challenge regarding the rejection of the deduction claimed under section 54F of the Income Tax Act, emphasizing the interpretation of relevant legal provisions and the discrepancies in the authorities' reasoning.
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