2020 (8) TMI 360 - AT - Income Tax

Deduction u/s 54F - Disallowance of claim as assessee has not filed any detail in support of the claim - CIT(A) has confirmed the disallowance only on one ground being more than one residential houses were owned by the assessee as on the date of sale - HELD THAT - Since CIT(A) has not discussed the other grounds which the AO has recorded in the assessment order along with this one which is considered by the ld. CIT(A) and further the assessee has now produced the additional evidence in support of the claim that he has not acquired the flat in question as such there is no violation of condition prescribed U/s 54F of the Act therefore, in the facts and circumstances of the case we set aside the matter to the record of the ld. CIT(A) to considered the additional evidence filed by the assessee and thereafter give a finding on all the issues and grounds which were raised by the AO while denying the deduction U/s 54F of the Act. Needless to say the assessee was granted one more opportunity of hearing before passing fresh order. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues Involved:
Disallowance of claim of deduction U/s 54F of the Act against the capital gain drive by the assessee during the year under consideration.

Detailed Analysis:

1. Background and Assessment: The appeal was against the order dated 27.02.2019 of ld. CIT (A)-IV, Jaipur for the assessment year 2013-14. The assessee, a contractor engaged in Civil Contract works, filed a return declaring total income of &8377; 25,49,550/-. The AO disallowed the deduction U/s 54F of the IT Act of &8377; 35,68,959/- on account of investment in a house property. The ld. CIT(A) confirmed this disallowance.

2. Contentions of the Assessee: The assessee argued that the disallowance was based on the ownership of more than one residential house, specifically a flat in Ahmedabad. The assessee claimed that the flat was not finally acquired due to disputes in the project, and additional evidence was submitted to support this claim. The assessee contended that until the flat was acquired, it should not be considered as violating the conditions of U/s 54F.

3. Revenue's Argument: The Revenue argued that the flat in Ahmedabad was part of the assessee's balance sheet and thus could not be disputed. They viewed the additional evidence as an afterthought following the disallowance by the AO, as these documents were not presented earlier.

4. Judgment and Decision: The AO's disallowance was based on various grounds, including the ownership of two residential houses, starting construction before the sale consideration, and not investing the full sale consideration in the property. The ld. CIT(A) upheld the disallowance primarily on the grounds of multiple residential properties owned by the assessee. However, the assessee's additional evidence raised doubts on the ownership status of the flat in question. The Tribunal set aside the matter to the ld. CIT(A) to consider the additional evidence and address all grounds raised by the AO in denying the deduction U/s 54F. The assessee was granted another hearing before a fresh decision.

5. Conclusion: The appeal of the assessee was allowed for statistical purposes, emphasizing the need for a comprehensive review of all grounds and evidence related to the disallowance of the deduction U/s 54F of the Act. The judgment was pronounced on 13/08/2020 by the Appellate Tribunal ITAT Jaipur, with detailed analysis and directions for further consideration.