CHINTHALAPALLI SACHINDRA,NELLORE V. ITO, WARD-1, NELLORE

ITA 124/HYD/2026

AI Insights

The case involves four stay applications filed by Vinod Aerukala and others against the ACIT, Central Circle-3(2), Hyderabad, concerning the denial of deduction under section 54F of the Income Tax Act, 1961, related to a Joint Development Agreement (JDA) from 2007. The Assessing Officer had assessed long-term capital gains and denied the deductions based on the grounds that the assessees received multiple units in the project, which allegedly violated the conditions of section 54F. The Tribunal noted that similar issues had been addressed in related cases and granted an early hearing, emphasizing the urgency due to ongoing recovery actions by the Assessing Officer.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 854650 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 22-07-2026
• Assessment Year: 2015-2016
• Appeal Filed On: 19-01-2026
• Other Referred Cases: Lavanya Polu and others vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital Gains; Search and seizure; Application of stay

Judgement Text

" 1 आयकर अपीलीय अिधकरण, हैदराबाद पीठ¤, हैदराबाद INCOME TAX APPELLATE TRIBUNAL, HYDERABAD B-BENCH, HYDERABAD [THROUGH HYBRID MODE] BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER Stay Application No.122/Hyd./2026 Arising out of ITA.No.2147/Hyd./2026 – A.Y. 2013-2014 Vinod Aerukala, PAN AOOPA5855R C/o. B. Narsing Rao & Co. LLP, Plot No.554, Road No.92, MLA Colony, Jubilee Hills, Hyderabad. PIN - 500 096. Telangana. Vs. The ACIT, Central Circle-3(2), Hyderabad. (Applicant) (Respondent) Stay Application No.123/Hyd./2026 Arising out of ITA.No.2148/Hyd./2026 – A.Y. 2013-2014 Arjun Goud Arakula, PAN AMOPA5083F C/o. B. Narsing Rao & Co. LLP, Plot No.554, Road No.92, MLA Colony, Jubilee Hills, Hyderabad. PIN - 500 096. Telangana. Vs. The ACIT, Central Circle-3(2), Hyderabad. (Applicant) (Respondent) Printed from counselvise.com SA 122 to 125/HYD/2026 VINOD AERUKALA & Others. 2 Stay Application No.124/Hyd./2026 Arising out of ITA.No.2157/Hyd./2026 – A.Y. 2013-2014 Srinivas Goud Arakula, PAN AMOPA5039R C/o. B. Narsing Rao & Co. LLP, Plot No.554, Road No.92, MLA Colony, Jubilee Hills, Hyderabad. PIN - 500 096. Telangana. Vs. The ACIT, Central Circle-3(2), Hyderabad. (Applicant) (Respondent) Stay Application No.125/Hyd./2026 Arising out of ITA.No.2150/Hyd./2026 – A.Y. 2013-2014 Girija Arakula, PAN AMOPA5084C C/o. B. Narsing Rao & Co. LLP, Plot No.554, Road No.92, MLA Colony, Jubilee Hills, Hyderabad. PIN - 500 096. Telangana. Vs. The ACIT, Central Circle-3(2), Hyderabad. (Applicant) (Respondent) आवेदक Ȫारा/Applicant represented by: Sri C Maheswar Reddy, CA & Sri Avinash, CA ŮȑथŎ Ȫारा/Respondent represented by: Sri K Prasad, Sr. AR सुनवाई की तारीख / Date of conclusion of hearing: 17.07.2026 घोषणा की तारीख / Date of pronouncement: 17.07.2026 Printed from counselvise.com SA 122 to 125/HYD/2026 VINOD AERUKALA & Others. 3 आदेश / ORDER PER SHRI VIJAY PAL RAO, VICE PRESIDENT: By way of these four stay applications by the four individual related assessee are seeking stay against the outstanding demand arising from the assessment orders passed u/sec.153A r.w.s.143(3) of the Income Tax Act [in short \"the Act\"], 1961, for the assessment year 2013-2014. 2. The learned Authorised Representative of the Assessee has submitted that the assessees along with other joint owners entered into Joint Development Agreement [in short “JDA”] whereby sharing the constructed area between the Developer and the Owners of the land. The assessments are framed by the Assessing Officer in pursuance to the search and seizure action in case of these assessees on 09.05.2018 wherein the JDA dated 03.05.2007 was found and consequently, the Assessing Officer has assessed the long term capital gains declared by the assessees in the return of income filed u/sec.153A of the Act but denying the claim of deduction u/sec.54 of the Act. Thus, the learned Authorised Representative of the Assessee has submitted Printed from counselvise.com SA 122 to 125/HYD/2026 VINOD AERUKALA & Others. 4 that the demand in question arose only because of denial of deduction u/sec.54F of the Act which is highly arbitrary and unjustified. The Assessing Officer rejected the claim on the ground that the assessees are got multiple units in the project. He has further pointed out that in the other related cases of the family members, the Tribunal has passed composite stay order dated 03.07.2026 in SA.Nos.118 to 121/Hyd./2026 and appeals of the other family members are now listed for hearing on 06.08.2026. Thus, the learned Authorised Representative of the Assessee has submitted that on identical facts the Tribunal granted an early hearing in case of other group and connected cases and also directed the Assessing Officer not to take any coercive action for recovery of the outstanding demand till the next date of hearing. He has also referred to the order of attachment of the properties of the assessee dated 15.05.2026 and submitted that there is an urgency in these matters to be heard on priority basis. Printed from counselvise.com SA 122 to 125/HYD/2026 VINOD AERUKALA & Others. 5 3. On the other hand, the learned DR has submitted that the assessees are non-filer of the returns of income u/sec.139(1) of the Act. Further, the JDA was detected during the course of search and seizure action and consequently, the Assessing Officer has assessed the long-term capital gains in the hands of the assessees in the proceedings u/sec.153A of the Act. Since the assessees are getting multiple units as their share in the constructed/developed property in terms of the JDA therefore, the assessees have not satisfied the conditions provided u/sec.54F of the Act and consequently, the Assessing Officer has rightly disallowed the claim of deduction u/sec.54F of the Act. The learned DR objected to grant of any stay against the recovery of outstanding demand and sale proclamation issued by the Assessing Officer. 4. We have considered the rival submissions as well as relevant material on record. The demand in these four cases has arisen due to denial of deduction u/sec.54 of the Act against the long term capital gains declared by the assessee in pursuance to the JDA dated 03.05.2007 which was found during the course of search and seizure action Printed from counselvise.com SA 122 to 125/HYD/2026 VINOD AERUKALA & Others. 6 dated 09.05.2018. This Tribunal in the case of other co- owners and parties to the same JDA in case of Lavanya Polu and others vs. DCIT in SA.Nos.118 to 121/Hyd./2026 vide Order dated 03.07.2026 considered the stay applications in Para no.4 as under: “4. We have considered the rival submissions as well as relevant material on record. The controversy in the appeals filed by the assessees is only regarding the allowability of claim u/sec.54F of the Act. The Assessing Officer has disallowed the deduction claimed of the assessees on the ground that the assessees are receiving multiple units in the project which is in violation of provisions of sec.54F of the Act. This issue is a debatable issue which can be considered and decided only after hearing the appeals and considering the relevant material as well as the judicial precedents on the point. Therefore, at this stage no view can be expressed on this point. Further the Assessing Officer has already issued a sale proclamation of the property where the assessees are residing vide letter dated 01.06.2026 and the sale/auction is scheduled for 09.07.2026. Thus, there is an urgency in the matter as the Assessing Officer has already started the proceedings of recovery by sale of the properties. Accordingly, in the facts and circumstances of the case and in the interest of justice, we grant an early hearing of the appeals filed by the assessee arisen from the assessment order passed u/sec.153A as well as the penalty order passed u/sec.271(1)(c) of the Act for the assessment year 2013-2014. The Registry is directed to list all the 04 appeals of these two assessees for hearing on 09.07.2026 as “out of turn hearing and in the category of stay rejected matters”. Printed from counselvise.com SA 122 to 125/HYD/2026 VINOD AERUKALA & Others. 7 Since the appeals are listed in different Benches therefore, all the appeals shall be listed on 09.07.2026 before the B-Bench. Accordingly, the date of hearing of the appeals fixed on 06.08.2026 and 21.12.2026 are now preponed to 09.07.2026. The date of hearing of the appeals is announced in the open Court and noted by both the parties therefore, no separate notice shall be issued in this respect. The Assessing Officer is directed not to take any coercive action for recovery of the outstanding demand till the next date of hearing of the appeals. The parties are directed to file paper book if any, well in advance by supplying a copy to the other side and not to take any adjournment of the hearing on the day fixed i.e., on 09.07.2026.” 4.1. In the case in hand, the Assessing Officer has also issued notice/order of attachment of immovable properties dated 15.05.2026. Accordingly, in the facts and circumstances of the case, we grant an early hearing of these appeals along with the other group matters listed on 06.08.2026. Consequently, the hearing of the appeals in these four matters is preponed from 15.09.2026 to 06.08.2026 and clubbed with the other connected matters. The Registry is directed to list these four appeals on 06.08.2026. Since the Assessing Officer has already initiated the proceedings for attachment of the immovable properties therefore, in the interest of justice, the Assessing Printed from counselvise.com SA 122 to 125/HYD/2026 VINOD AERUKALA & Others. 8 Officer is directed not to take any coercive action for recovery of the outstanding demand till the next date of hearing of the appeals. The parties are directed to file the paper book if any, well in advance after supplying a copy to the other side. Since the date of hearing of the appeal is announced in the open Court, no separate notice shall be issued in this regard. 5. In the result, all the above four stay applications of the assessees are rejected and early hearing is granted. Order pronounced in the open court at the conclusion of the hearing i.e., on 17.07.2026. Sd/- Sd/- MADHUSUDAN SAWDIA ACCOUNTANT MEMBER VIJAY PAL RAO VICE PRESIDENT Hyderabad, Dated 17th day of July, 2026 VBP Printed from counselvise.com SA 122 to 125/HYD/2026 VINOD AERUKALA & Others. 9 Copy to: 1 to 4 VINOD AERUKALA, (2) ARJUN GOUD ARAKULA, (3) SRINIVAS GOUD ARAKULA (4) GIRIJA ARAKULA C/O. B.NARSING RAO AND CO LLP, PLOT NO.554, RD NO.92, JUBILEE HILLS, HYDERABAD-500096, TELANGANA 5 ACIT, CENTRAL CIRCLE-3(2), HYDERABAD, PIN - 500034, TELANGANA 6 THE PR. CIT-(CENTRAL), HYDERABAD. 7 THE D.R., ITAT, HYDERABAD B-BENCH, HYDERABAD. 8 GUARD FILE TRUE COPY ASSISTANT REGISTRAR / I.T.A.T., HYDERABAD Printed from counselvise.com VADREVU PRASADA RAO Digitally signed by VADREVU PRASADA RAO Date: 2026.07.17 16:28:19 +05'30' "