2023 (4) TMI 1097 - AT - Income Tax

Deduction u/s 54F - purchase of residential property at Hyderabad - DR had submitted that the assessee had not purchased any residential property within a period of two years from the date of sale of capital asset and as such, the assessee is not entitled to the relief u/s 54F - assessee stated that he had made the payment partially upto the date of filing of return of income to Builder/Developers - HELD THAT - In the present case, though the assessee had paid more than 80% of the payment to the builder, yet a substantial amount of more than rupees Rs.1 crore was to be paid by the assessee to the builder, the balance payments were made beyond the time provided by the Act. In the light of the above, it has to be decided on the facts whether the assessee had purchased the residential house within four corners of section 54F or not. Though there are various decisions which are mentioned hereinabove in the submissions of the assessee, however, those are required to be examined by the lower authorities in the light of new facts namely, registration of sale deed dt.01.12.2021. In view of the above, we are of the opinion that the matter is required to be remanded back to the file of the Assessing Officer for examining afresh. Essential for the assessee to prove that she does not have more than a residential house at the time of claiming deduction u/s 54F - The documents produced before us clearly mentions the address of the assessee as 133A, Road No.15, Jubilee Hills, Hyderabad, Telangana 500003. This aspect has not been brought to the notice of the Assessing Officer by the assessee. As per the contention of the ld. DR, the ld.CIT(A) while deciding the issue had relied upon various documents produced before him at the time of appellate proceedings. For the above said purposes, we may fruitfully refer order of CIT(A) wherein the ld.CIT(A) had mentioned that the assessee had produced SRO Certificate, Municipal Taxes and GST receipts to show that the property mentioned in the return of income filed by the assessee were in the nature of commercial property and was not in the nature of residential property. As the case may be, without giving any finding on the above said facts, in the interests of justice, the case is required to be remanded back to the file of Assessing Officer with a direction to examine afresh having regard to the SRO Certificate, GST and Municipal Tax Receipts and to record a categorical finding as to for what purposes the facts were approved by municipal authorities. AO shall decide the issue in accordance with law after affording due opportunity of hearing to the assessee in accordance with law - Appeal of the Revenue is allowed for statistical purposes.

Summary

Issues Involved:
1. Admission of additional evidence without allowing the Assessing Officer to examine/rebut it.
2. Allowing deduction under section 54F despite non-compliance with the stipulated time frame.
3. Classification of properties as commercial units without supporting evidence.

Summary:

1. Admission of Additional Evidence:
The Revenue challenged the CIT(A)'s decision to admit additional evidence, specifically the Certificate of SRO, without providing the Assessing Officer an opportunity to examine or rebut it under Rule 46A of the Income Tax Rules, 1962. The Tribunal noted that the CIT(A) admitted public documents like the SRO certificate, municipal taxes, and GST receipts, which could have been obtained by the Assessing Officer. The Tribunal remanded the case back to the Assessing Officer to re-examine these documents and provide a categorical finding on their nature and purpose.

2. Deduction under Section 54F:
The Revenue contended that the assessee did not purchase the residential property within the two-year period required under section 54F. The Tribunal observed that the assessee had paid a substantial amount to the builder but had not received possession or registered the property within the stipulated time. The Tribunal emphasized the need for strict compliance with section 54F and remanded the case to the Assessing Officer to re-examine whether the assessee fulfilled the conditions for claiming the deduction, especially in light of the new fact of the sale deed dated 01.12.2021.

3. Classification of Properties:
The Revenue argued that the CIT(A) wrongly categorized nine independent properties as commercial units without sufficient evidence. The Tribunal noted that the CIT(A) relied on documents like SRO certificates and municipal tax receipts to classify the properties. The Tribunal directed the Assessing Officer to re-examine these documents and determine whether the properties were indeed commercial or residential.

Conclusion:
The Tribunal remanded the case back to the Assessing Officer to re-examine the additional evidence, compliance with section 54F, and the classification of properties, ensuring adherence to legal procedures and providing the assessee an opportunity to present further evidence. The appeal of the Revenue was allowed for statistical purposes.