DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), CHANDIGARH V. POONAM KHETRAPAL SINGH, CHANDIGARH

ITA 1000/CHANDI/2024

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A), National Faceless Appeal Centre, Delhi, which allowed the deduction under section 54F(4) of the Income Tax Act, 1961 to the assessee, Poonam Khetrapal Singh. The Revenue contested the CIT(A)'s findings on several grounds, primarily challenging the ownership of certain properties and the application of section 54F(4) concerning the reinvestment of capital gains from the sale of a property. The Tribunal's decision focused on whether the assessee met the statutory requirements for the deduction under section 54F(4), particularly regarding the deposit of sale proceeds in a designated account.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714497 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUSUM BA NSAL
• Assessee Lawyers: ASHISH KUMAR SINGH
• Keywords: Set aside; Capital asset; Additional evidence; Capital Gains
• Section: 54; 54F; 2

Judgement Text

"आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘B’, CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 1000/CHD/2024 Ǔनधा[रण वष[ / Assessment Year : 2021-22 DCIT, Circle 1(1), Chandigarh बनाम Vs. Poonam Khetrapal Singh, H. No 816, Sector 16, Chandigarh. èथायी लेखा सं./PAN NO: ANQPS6367R अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( Hybrid Hearing ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Sh. Ashish Kumar Singh, Advocate राजèव कȧ ओर से/ Revenue by : Smt Kusum Bansal, CIT DR (Virtual mode) सुनवाई कȧ तारȣख/Date of Hearing : 15-05-2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 06-08-2025 आदेश/Order Per Krinwant Sahay, AM: Appeal in this case has been filed by the Revenue against the order dated 29.7.2024 of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi. 2. Grounds of appeal are as under: - 1. The findings of Ld. CIT(A) are perverse in the facts of the case with respect of ownership of Housing Printed from counselvise.com 1000-Chd-2024 Poonam Khetrapal Singh, Chandigarh 2 Properties so much so that the property which was already in possession of the assessee and assessee has herself claimed deduction u/s 54 F on account of investment on reconstruction of the same i.e. C-217A, Defence Colony, New Delhi, has been held to be not owned by the assessee. 2. The Ld. CIT(A) has erred in facts and law in holding that property (# 302A, Silver Arch Apartment, Feroz Shah Road, New Delhi) from which assessee herself has shown income from House Property for assessment year under consideration i.e. A.Y 2021-22 itself, has been held to be not owned by the assessee. 3 The Ld. CIT(A) has erred in facts and law in allowing the deduction u/s 54F of the Income Tax Act, 1961 ignoring the facts that assessee was owning more than one residential house other than new asset on the date of transfer of capital asset i.e. Plot No. 15, Pocket / Block C2, Sushant Lok-L Guru gram. 4 The Ld. CIT(A) has erred in facts and law on allowing benefit of additional evidence submitted by the assessee during the appellate proceedings without providing opportunity to offer his comments of the Assessing Officer and without giving finding in writing before admitting the same as required by the Rule 46A of the Income Tax Rule, 1962 read with Section 295(2)(mm) of the Income Tax Act, 1961. Printed from counselvise.com 1000-Chd-2024 Poonam Khetrapal Singh, Chandigarh 3 5 It is prayed that the order of the Ld. CIT(A) be set aside and that of the Assessing Officer may be restored. 6. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard or is disposed off. 3. Although there are many grounds of appeal taken by the Revenue in this case but the main ground of appeal is against the action of the CIT(A) for allowing deduction u/s 54F(4) of the Income Tax Act, 1961 (in short 'the Act'). The Ld. CIT(A) has given his findings on this issue as under: - “6.3.1 I find that during the assessment stage itself, the assessee claimed that the entire sale consideration of Rs.3,21,00,000/- was deposited by her in the capital gain account bearing No.0175001000000301 and submitted a copy of the bank statement with the Assessing Officer, The Assessing Officer ignored such submission. 6.3.2 I have perused the issue and I find that in section 54F(4) the statue provides that the amount of consideration which is not used by the assessee within one year before the date of transfer or not utilized for purchase or construction of new asset before the due date of filing of return u/s.139(1) for the year of the Printed from counselvise.com 1000-Chd-2024 Poonam Khetrapal Singh, Chandigarh 4 transfer, such unutilized amount has to be deposited in a bank account and to be utilized within the stipulated period as per the statue for purchase or construction of a new house. In this case, although during the year the assessee could not purchase or construct a new house but deposited the entire receipt in the capital gain account as stipulated by the statute before the due date of filing of return. Therefore, the Assessing Officer was not correct in denying the benefit of deduction. In case, the assessee failed to purchase a new house by July, 2022 or constructed a new house in July, 2023, the Assessing Officer has to revisit the issue and impose tax accordingly in the relevant Assessment Year. However, for the period under consideration, she was eligible to get the deduction of the entire amount of capital gain as the entire amount of receipt was deposited in the specified scheme prescribed in section 54F. The AO is directed to allow the deduction u/s.54F on the entire capital gain as calculated by the assessee in the return of income. The grounds taken in this issue is therefore allowed.” 4. Per contra, the Ld. DR relied on the order of the AO. 5. We have considered the findings given by the Assessing Officer in the assessment order and by the Ld. CIT(A) in the appellate order. We find that the Assessee has deposited the entire sale consideration in the capital gains account as discussed by the Printed from counselvise.com 1000-Chd-2024 Poonam Khetrapal Singh, Chandigarh 5 ld. CIT(A) in this order. Therefore, there is no question of disallowing the same and charging capital gain on the same amount. 6. The Ld. CIT(A) has very clearly given his findings that in case the Assessee does not purchase a new property or get constructed a new house within time prescribed under the Act, then Assessing Officer has to revisit the same section and deny the capital gains, but during the period under consideration, the Assessee is very much entitled to make deposits of the sale proceedings in the capital gains account and claim deduction u/s 54F(4) of the Act. Thus, we do not find any reason to interfere in the findings given by the Ld. CIT(A) on this issue. Accordingly, Revenue’s appeal on this issue is dismissed. 7. In the result, appeal is dismissed. Order pronounced on 06/08/2025. Sd/- Sd/- ( RAJPAL YADAV ) ( KRINWANT SAHAY) Vice President Accountant Member “आर.क े.” Printed from counselvise.com 1000-Chd-2024 Poonam Khetrapal Singh, Chandigarh 6 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar . Printed from counselvise.com "