Tax Appeal Outcome: Sec. 54F Deduction Allowed, Settlement Disallowance Deleted, Interest Issue Referred

The appeal involved disputes regarding sec. 54F deduction claim, cost of improvement claim, disallowed settlement amount, and interest computation issue. The tribunal allowed the sec. 54F deduction claim of &8377; 60,94,982/- based on relevant circulars and precedents, directing the Assessing Officer to allow the deduction. The claim for improvement cost was not pressed and affirmed. The disallowance under sec. 43CA was deleted as the settlement predated the relevant provision. The interest computation issue was referred back to the Assessing Officer following a high court decision. The appeal was partly allowed on 2nd March 2020.

---

---

Issues:
1. Sec. 54F deduction claim for capital gains on property conversion.
2. Claim of cost of improvement of capital asset.
3. Disallowance under sec. 43CA for a settlement amount.
4. Interest computation issue based on a high court decision.

Sec. 54F Deduction Claim:
The appeal involved the assessee's grievance against the denial of sec. 54F deduction claim of &8377; 60,94,982/- for the assessment year 2015-16. The issue centered around the conversion of a capital asset into stock-in-trade in 2012 and subsequent sale in 2014. The Revenue contended that the date of transfer should be considered as the conversion date as per sec. 2(47)(iii) of the Act. Referring to a previous tribunal's decision, the tribunal held that the assessee was entitled to the deduction under sec. 54F based on relevant CBDT circulars and judicial precedents. The tribunal directed the Assessing Officer to allow the deduction.

Cost of Improvement Claim:
The counsel did not press for the claim of &8377; 77,758/- for the improvement cost of the capital asset, which was affirmed accordingly.

Disallowed Settlement Amount:
The dispute revolved around an amount of &8377; 4,47,846/- related to a settlement for a residential unit in 2009, with the Revenue invoking sec. 43CA of the Act based on an agreement in 2015. The tribunal found that the settlement in 2009 predated the relevant provision of sec. 43CA, which came into effect in 2014. Therefore, the tribunal directed the Assessing Officer to delete the disallowance.

Interest Computation Issue:
The interest computation issue was referred back to the Assessing Officer based on a high court decision in Ajay Prakash Verma vs. ITO, as per the tribunal's decision.

The appeal was partly allowed, and the order was pronounced on 2nd March 2020, directing the Assessing Officer to take necessary actions based on the tribunal's findings.

---