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of <h1>ITAT allows appeal for deduction u/s. 54, deeming construction delay beyond control. Remitted for further examination.</h1> <h3>Shri. Suriyamoorthy Shanmugavel Versus The Income Tax Officer, Non Corporate Ward 14 (2), Chennai.</h3> Shri. Suriyamoorthy Shanmugavel Versus The Income Tax Officer, Non Corporate Ward 14 (2), Chennai. - TMI Issues:1. Deduction u/s. 54 claimed by the assessee disallowed by AO.2. CIT(A) confirming the order of AO.3. Assessee's appeal against the CIT(A)'s decision.Analysis:1. The assessee sold a property and invested in vacant lands for claiming deduction u/s. 54. The AO disallowed the deduction as the land remained vacant without construction within the stipulated time frame. The AO assessed the income under long term capital gains. The CIT(A) upheld the AO's decision, stating that the circumstances cited by the assessee did not allow for discretion in granting the deduction.2. The assessee argued before the ITAT that due to a High Court order restricting construction in unauthorized layouts, he could not start construction within the specified period. The ITAT noted the sequence of events, including the legal restrictions and subsequent actions taken by the assessee. The ITAT found that the delay in construction was beyond the assessee's control and not intentional. Therefore, the ITAT directed the AO to treat the construction as made within time and remitted the issue back to the AO for further examination of the conditions for granting deduction u/s. 54.3. The ITAT's decision allowed the appeal partly, emphasizing that the delay in construction was due to legal restrictions and circumstances beyond the assessee's control. The ITAT directed the AO to re-examine the issue of deduction u/s. 54 after considering all relevant aspects. The appeal was treated as partly allowed for statistical purposes, with the order pronounced on 22nd January 2020 at Chennai.
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