2019 (2) TMI 717 - AT - Income Tax

Deduction u/s. 54F - CIT(A) has accepted the claim of assessee in respect to only the property purchased at Kolkata with the aforesaid rider - Held that - Allowing the deduction u/s. 54F in the assessment proceedings, we are of the opinion that the assessee should have been given the deduction u/s. 54F of the Act and, moreover even if the title is imperfect, it s legal consequences if any in-respect to flat is the look out of assessee and any defect if any in the mode of transfer of property cannot defeat the claim of assessee in this assessment year, because it is not the case of CIT(A) that it is a bogus claim, when the fact of possession of flat by assessee and sale consideration passed to the vendor and genuineness of the transaction having been accepted by AO and this fact not even been questioned by CIT(A), the claim ought not to have been disallowed by CIT(A), therefore, we allow the claim of the assessee for the purchase of flat in Delhi u/s. 54F of the Act. - Decided in favour of assessee partly.

Summary

Issues:
1. Deduction u/s. 54F for property purchased in Delhi on General Power of Attorney.

Analysis:
The appellant's appeal arose from the order of the Commissioner of Income Tax (Appeals) for the assessment year 2012-13. The appellant raised revised grounds of appeal challenging the CIT(A)'s decision. The CIT(A) allowed deduction u/s. 54F for the property purchased in Kolkata but denied the deduction for the property in Delhi acquired through a General Power of Attorney. The main issue was the recognition of the property purchased in Delhi on a General Power of Attorney for claiming deduction u/s. 54F. The AO initially accepted this claim but later disallowed it. The Tribunal referred to a Delhi High Court judgment stating that conveyance of property by General Power of Attorney constitutes a transfer of capital asset. The Tribunal noted that the AO had allowed the deduction for the Delhi property during assessment. Considering the legal implications and the genuineness of the transaction, the Tribunal held that the appellant should be given the deduction u/s. 54F for the property in Delhi. The Tribunal emphasized that any imperfection in title or mode of transfer should not defeat the appellant's claim, especially when the possession of the property and transaction genuineness were not in question. Therefore, the Tribunal allowed the appellant's claim for the purchase of the flat in Delhi u/s. 54F of the Income-tax Act, 1961.

In conclusion, the Tribunal partly allowed the appellant's appeal, granting the deduction u/s. 54F for the property purchased in Delhi on a General Power of Attorney. The Tribunal's decision was based on legal precedents and the genuineness of the transaction, emphasizing that any title imperfections should not hinder the legitimate claim for deduction.