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Issues involved: Dispute over deduction claimed on compensation paid to tenant while computing capital gain from property sale; Dispute over allowability of deduction u/s 54 of the Income-tax Act.
Issue 1: Deduction claimed on compensation paid to tenant The appellant, a financing business, declared capital gain from the sale of property and claimed a deduction of &8377; 25 lakhs for payment to the tenant, Shri Ramesh Nichlani. The Assessing Officer disallowed the claim due to lack of evidence. In appeal, the appellant presented an old agreement showing tenancy, along with evidence of subletting. The CIT (A) allowed the claim based on this new evidence. The Tribunal noted the fresh evidence and decided to send the issue back to the Assessing Officer for reevaluation after considering the additional evidence. Issue 2: Allowability of deduction u/s 54 of the Income-tax Act The appellant purchased a residential house using capital gain, seeking exemption u/s 54. The Assessing Officer disallowed the claim, stating the appellant was not the owner of the property sold, only the land. In appeal, the appellant provided an agreement showing joint ownership of the residential house. The CIT (A) accepted the evidence and allowed the deduction. The Tribunal found that the agreement was not submitted to the Assessing Officer and decided to remand the issue for a fresh assessment after considering all additional evidence. Separate Judgment: The dispute over deduction on compensation paid to the tenant, Shri Ramesh Nichlani, in the case of Shri Bhagwandas A Nichlani is similar to the issue raised in the case of Mrs. Sheela B Nichlani. Following the decision on Mrs. Sheela B Nichlani's case, the Tribunal remanded this issue to the Assessing Officer for reevaluation after considering additional evidence and providing an opportunity for the assessee to be heard. In conclusion, the Tribunal allowed both appeals of the revenue for statistical purposes, with orders pronounced on 12th March 2010.
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