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2014 (5) TMI 1076 - AT - Income TaxClaim exemption under section 54F denied - Held that - In the case in hand, the residential property was not purchased by the assessee at the time of filing of the return. The claim was specifically made by the assessee before the appellate authority. But the first appellate authority failed to exercise its jurisdiction to consider the claim of the assessee. We accordingly set aside the impugned order of the ld. CIT(A) and remand the matter back to the file of the ld. CIT(A) with a direction to consider the claim of the assessee regarding deduction under section 54F of the Act on merits after giving property opportunity to the assessee to represent his case. - Decided in favour of assessee for statistical purposes.
Issues:
1. Disallowance of deduction under section 54EC 2. Disallowance of claim under section 54F Disallowance of deduction under section 54EC: The appellant contested the disallowance of the claim of deduction under section 54EC and 54F of the Income Tax Act. The appellant acknowledged that since the investment in bonds was made before the occurrence of capital gains, they were not entitled to claim exemption under section 54EC. Consequently, the ground agitating the disallowance of the deduction under section 54EC was dismissed. Disallowance of claim under section 54F: The appellant strongly contested the disallowance of the claim under section 54F. Initially, the appellant did not claim any deduction under section 54F in the return of income despite showing long-term capital gains. During the assessment proceedings, the appellant claimed the deduction under section 54F, stating it was not claimed earlier due to the timing of the purchase of the house property. However, the Assessing Officer disallowed the claim as it was not made in the original or revised return but through a revised computation. The Commissioner of Income Tax (Appeals) upheld the disallowance, stating that the claim should have been made through a revised return. The appellant appealed this decision, citing relevant legal precedents. The Appellate Tribunal noted that the jurisdictional High Court decision allowed claims to be made before appellate authorities even if not raised before the Assessing Officer. The Tribunal emphasized that appellate authorities have the power to consider additional claims, and the restriction on making claims through a revised return applies to the Assessing Authority, not the appellate authorities. The Tribunal criticized the Commissioner of Income Tax (Appeals) for not considering the appellant's claim, stating it was essential for a just decision. The Tribunal highlighted the quasi-judicial power of the appellate authority under the Act and stressed the need for fair and justifiable exercise of discretion in admitting or rejecting new/additional claims. Consequently, the Tribunal set aside the decision of the Commissioner of Income Tax (Appeals) and remanded the matter for reconsideration, directing a thorough review of the appellant's claim under section 54F. The Tribunal emphasized the importance of giving the appellant a fair opportunity to represent their case. The appeal of the appellant was allowed for statistical purposes. In conclusion, the Tribunal's judgment addressed the disallowance of deductions under sections 54EC and 54F, highlighting the procedural aspects of making claims under the Income Tax Act and the powers of appellate authorities to consider additional claims for the interest of justice.
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