Home Income tax Corporate Income tax CG is Eligible to Deduct U/S 54F IF Buying Residential Property Before Return Filing

CG is Eligible to Deduct U/S 54F IF Buying Residential Property Before Return Filing

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CG is Eligible to Deduct U/S 54F IF Buying Residential Property Before Return Filing
Chennai ITAT's Order for Zannathul Firdouse

Shopping for residential home property previous to the final ITR submitting date makes the taxpayer certified for the deduction below part 54F of the Revenue Tax Act, the Chennai bench of the Revenue Tax Appellate Tribunal (ITAT) dominated.

The petitioner is a person and has submitted her Revenue tax return for the AY 2012-13 dated 01.06.2013, disclosing a complete revenue of Rs. 2,76,760/-. On the time of the the fiscal yr pertinent to the AY 2012-13, the appellant together with 7 different members of the family entered right into a Joint Growth Settlement (JDA) dated 01.04.2011, for the event of 72092 sq. ft. of land at Zameen Pallavaram Village.

The appellant and the co-owners have obtained 91833 sq. ft. of the tremendous built-up space comprised of 70 residential flats and three penthouses together with 27 lined automobile parking and 49 open automobile parking, as per JDA.

The appellant computed long-term capital beneficial properties arising from the switch of a property primarily based on the JD Settlement dated April 1, 2011, for the evaluation yr 2012-13. This calculation concerned contemplating her share of the consideration obtained for the property switch. Moreover, the appellant sought a deduction below Part 54F of the Revenue Tax Act for the development of flats to be obtained from the client.

Nonetheless, the Assessing Officer rejected the deduction below Part 54F, citing two fundamental causes. Firstly, the assessee had claimed deductions for a number of flats, and secondly, the development of the property exceeded the due date laid out in Part 54F of the Act.

Because the property development was nonetheless incomplete as of March 4, 2016, the Assessing Officer disallowed the deduction below Part 54F and added Rs. 64,92,456/- to the entire revenue.

Displeased with this evaluation order, the assessee filed an enchantment with the CIT(A). After contemplating the related submissions from the assessee, the CIT(A) concluded that the appellant was not eligible for a deduction below Part 54F of the Revenue Tax Act. This choice was primarily based on the truth that the appellant had violated two situations stipulated in Part 54F.

Particularly, she bought a brand new residential flat on Might 24, 2012, along with the brand new flats for which she claimed deductions below Part 54F of the Act. Unhappy with the CIT(A)’s choice, the assessee subsequently appealed to the tribunal.

Upon contemplating arguments from each events, the tribunal noticed that Part 54F of the Act specifies the situations for claiming deductions on capital beneficial properties. To be eligible for this deduction, the assessee should purchase a brand new residential home property both one yr earlier than or two years after the switch of the unique asset.

Moreover, relating to property development, it have to be accomplished inside three years from the date of the unique asset’s switch. Within the case at hand, the assessee bought a brand new residential home property on April 25, 2012, which falls throughout the two-year interval following the switch of the unique asset.

The 2-member bench, consisting of Manmohan Das (Judicial Member) and Manjunatha G. (Accountant Member), concluded that because the appellant had met all of the prescribed situations for claiming a deduction below Part 54F of the Revenue Tax Act, the CIT(A) ought to have granted the alternate declare made by the assessee for a deduction below Part 54F of the Revenue Tax Act.

Consequently, the CIT(A)’s choice was overturned, and the Assessing Officer was instructed to permit the deduction below Part 54F of the Act in relation to the residential home property acquired by the assessee on April 25, 2012. Because of this, the enchantment was permitted.

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