AMAN KUMAR GUPTA,AGRA V. CIRCLE-1(2)(1), AGRA, AGRA

ITA 173/AGR/2023

AI Insights

The case revolves around the disallowance of a deduction claimed under section 54 of the Income-tax Act, 1961 by Aman Kumar Gupta, who had sold a residential property and reinvested the proceeds into another residential property. The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) (CIT(A)) had disallowed the deduction, categorizing the sold property as agricultural land rather than a residential house. The Tribunal, after reviewing the sale and purchase deeds, construction bills, and other evidences, concluded that the property sold was indeed a residential house, thus entitling the assessee to the claimed deduction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470228 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHALENNDRA SRIVASTAVA
• Assessee Lawyers: RAKESH GUPTA
• Section: 143(3); 54; 20

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “DB”: AGRA SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER (Through virtual hearing) ITA No. 173/AGR/2023 (Assessment Year: 2016-17) Aman Kumar Gupta, A-25, Ram Nagar Colony, Agra, UP Vs. ACIT, Circle-1(2)(1), Agra (Appellant) (Respondent) PAN: ABCPG4729P Assessee by : Dr. Rakesh Gupta, Adv Shri Ravi Agarwal, Adv Shri Somil Agarwal, Adv Revenue by: Shri Shalenndra Srivastava, Sr. DR Date of Hearing 04/02/2025 Date of pronouncement 04/02/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.173/AGR/2023 for AY 2016-17, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] dated 29.09.2023 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 21.12.2018 by the Assessing Officer, ACIT, Circle-1(2)(1), Agra (hereinafter referred to as ‘ld. AO’). 2. The only effective issue to be decided in this appeal is as to whether the learned CIT(A) was justified in confirming the disallowance of claim of deduction claimed by the assessee under section 54 of the Act in the facts and circumstances of the instant case. ITA No. 173/AGR/2023 Aman Kumar Gupta Page | 2 3. We have heard the rival submissions and perused the materials available on record. The assessee on 18-06-2010 and 29-06-2010 purchased house at Khasra No. 128, 129 at Village Mohammadpur for Rs.10,84,299/- and Rs.18,18,500/- respectively. There was one room, washroom and bathroom in the said property. This property was sold by the assessee on 27-05-2015 for Rs. 2,25,75,000/-. The sale deed is enclosed in pages 73-91 of the paper book. In the said sale deed, it has been very clearly mentioned with the map showing the fact of construction of house property in the subject mentioned land. Hence, what was purchased by the assessee was a old house. What was sold by the assessee was old house together with land appurtenant thereto. Accordingly, it could be safely construed that the assessee sold the residential house property during the year under consideration. After the sale of residential house on 27-05-2015, the assessee utilized the sale proceeds by reinvesting in another house property at Village Artoni at Agra on 26-11-2015 for Rs. 1,91,22,000/- and carried out further construction thereon to the tune of Rs. 8,03,025/- in Assessment years 16-17 and 17-18 cumulatively. The evidences in this regard are enclosed in pages 92-115 of the paper book and pages 18-19 of the paper book respectively. For the amount reinvested in purchase of new residential house property, the assessee claimed deduction under section 54 of the Act in the return of income. This deduction was sought to be disallowed by the Ld AO on the ground that what was originally sold by the assessee was only agricultural land and it cannot be construed as a residential house as there was only one room with washroom and bathroom which was available in the said lands. Hence, what was sold according to Ld AO was not a residential house property and consequentially, the assessee would not be eligible to claim deduction under section 54 of the Act. This action of the Ld AO was upheld by the Ld CIT(A). ITA No. 173/AGR/2023 Aman Kumar Gupta Page | 3 4. From the documents placed on record containing the sale deed for sale of old house and purchase deed for purchase of new house, it is amply clear that assessee had sold a residential house property and had reinvested in another residential house property. Hence, in our considered opinion, the assessee would be entitled for claim of deduction under section 54 of the Act. One more aspect which had been heavily relied upon by the Ld DR before us to defend the orders of the lower authorities was the report of the Inspector of Income Tax who had carried out physical inspection of the property in the year 2018 wherein he had reported that there was no house constructed in the said land. In this regard, the learned AR buttressed the argument of the learned DR by stating that the house was purchased in June 2010 and sold by the assessee in May 2015. In the year 2018, when the Inspector had visited the subject mentioned property, the assessee had already lost control over the said property and the new buyer could have demolished the old property and could have carried out or utilized the property for any purpose which would suit his or her own requirements. Hence, merely because there was no constructed house property which was existing on the date of inspection, it cannot be said that assessee had never constructed the house on the subject mentioned land. We find lot of force in this argument of the Ld AR. Further, we also find that from the photograph of the land which is also enclosed in pg 20 and 20A of the paper book, which proves that there was indeed house property existing in the subject mentioned land. Accordingly, we have no hesitation to conclude that what was sold was a residential house property and what was reinvested was also a residential house property. The assessee had also enclosed the bills for carrying out construction in the sum of Rs 8,03,025/- partially in pages 18 to 19 of the paper book. Accordingly, we hold that assessee would be entitled for claim of deduction under section 54 of the Act. Accordingly, the grounds raised by the assessee are allowed. ITA No. 173/AGR/2023 Aman Kumar Gupta Page | 4 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 04/02/2025. -Sd/- -Sd/- (SATBEER SINGH GODARA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 04/02/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "