Tribunal allows appeal, grants exemption under section 54F

The Tribunal allowed the appeal, overturning the CIT(A)'s decision to disallow the exemption claimed under section 54F of the Income Tax Act for the assessment year 2010-11. The Tribunal emphasized that in abated assessments under section 153A, fresh claims are permissible, akin to returns under section 139, and relevant provisions can be applied. The appellant successfully challenged the Assessing Officer's presumption regarding property ownership, citing precedents supporting the right to raise fresh claims before appellate authorities. The Tribunal directed the Assessing Officer to verify the claim and grant the deduction if the appellant's eligibility is confirmed based on the ownership status of the residential property.

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Issues:
Disallowance of exemption claimed under section 54F of the Income Tax Act for the assessment year 2010-11.

Analysis:
The appellant, in this case, challenged the decision of the CIT(A) confirming the disallowance of exemption claimed under section 54F of the Income Tax Act. The appellant initially did not claim any deduction under section 54F in the returns filed for the year under consideration. However, in a revised return filed under section 153A, the appellant claimed the deduction concerning a new flat purchased by her.

The Assessing Officer rejected the claim based on the appellant owning a property at Avasekar Heights, which was let out, and staying in another residential property, implying ownership of another undisclosed property. The CIT(A) upheld this decision, citing precedents like Charchit Agarwal Vs. CIT and Genmal Kothari Vs. DCIT, which restricted fresh claims in section 153A returns.

During the appeal, the appellant argued that the property where she resides does not belong to her, challenging the Assessing Officer's presumption. The appellant's representative highlighted the distinction between section 147 and section 153A proceedings, emphasizing the scope for fresh claims in abated assessments, as per the decision in CIT Vs. B.G. Shirke Construction Technology.

The Tribunal, after considering the arguments, found merit in the appellant's contention. Citing the decision of the Bombay High Court in B.G. Shirke Construction Technology, the Tribunal noted that in abated assessments, the entire assessment is open before the Assessing Officer. The Tribunal emphasized that the return filed under section 153A is akin to a return under section 139, allowing for fresh claims and application of relevant provisions.

The Tribunal also referred to the decision in CIT vs. Pruthvi Brokers & Shareholders (P) Ltd., affirming the right of an assessee to raise fresh claims before appellate authorities. Consequently, the Tribunal allowed the appellant's appeal, directing the Assessing Officer to verify the claim under section 54F and grant the deduction if satisfied with the appellant's eligibility, considering the ownership status of the residential property where the appellant resides.

In conclusion, the Tribunal allowed the appeal, setting aside the CIT(A)'s order and instructing the Assessing Officer to grant the deduction under section 54F after due verification.

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