The assessee claimed exemption/deduction u/s 54F on account of ...

ITAT allows Section 54F deduction, ruling stock-in-trade properties don't count as residential houses for tax purposes.

September 30, 2024

Case Laws Income Tax AT

The assessee claimed exemption/deduction u/s 54F on account of investing long-term capital gains in a new residential house. The PCIT disallowed the claim, considering the assessee owned more than one residential house on the date of sale of the original asset. However, the ITAT held that incomes from residential houses held as stock-in-trade were not liable to tax under 'Income from House Property' and did not qualify as 'residential house' u/s 54F. The PCIT provided no reasoning for considering the stock-in-trade property as a residential house. Regarding agricultural land, the PCIT's finding of small houses qualifying as residential houses based on electricity supply and local tax assessment lacked legal basis. The ITAT set aside the PCIT's order denying Section 54F deduction and directing assessment under 'Income from House Property'. The PCIT's direction to deny Chapter VI-A deductions was also set aside as the assessee had not claimed any such deductions. The ITAT held the PCIT's order unsustainable due to lack of concrete findings of error in the AO's order.

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The assessee claimed exemption/deduction u/s 54F on account of ...

ITAT allows Section 54F deduction, ruling stock-in-trade properties don't count as residential houses for tax purposes.

September 30, 2024

Case Laws Income Tax AT

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