ITAT Jaipur directs review of Section 54F deduction disallowance, remands to CIT(A) for fresh consideration.

The Appellate Tribunal ITAT Jaipur allowed the assessee's appeal for statistical purposes, directing a comprehensive review of all grounds and evidence related to the disallowance of the deduction under Section 54F of the Income Tax Act. The Tribunal set aside the matter to the ld. CIT(A) for reconsideration in light of the additional evidence provided by the assessee, granting a fresh hearing for a new decision.

---

---

Issues Involved:
Disallowance of claim of deduction U/s 54F of the Act against the capital gain drive by the assessee during the year under consideration.

Detailed Analysis:

1. Background and Assessment: The appeal was against the order dated 27.02.2019 of ld. CIT (A)-IV, Jaipur for the assessment year 2013-14. The assessee, a contractor engaged in Civil Contract works, filed a return declaring total income of &8377; 25,49,550/-. The AO disallowed the deduction U/s 54F of the IT Act of &8377; 35,68,959/- on account of investment in a house property. The ld. CIT(A) confirmed this disallowance.

2. Contentions of the Assessee: The assessee argued that the disallowance was based on the ownership of more than one residential house, specifically a flat in Ahmedabad. The assessee claimed that the flat was not finally acquired due to disputes in the project, and additional evidence was submitted to support this claim. The assessee contended that until the flat was acquired, it should not be considered as violating the conditions of U/s 54F.

3. Revenue's Argument: The Revenue argued that the flat in Ahmedabad was part of the assessee's balance sheet and thus could not be disputed. They viewed the additional evidence as an afterthought following the disallowance by the AO, as these documents were not presented earlier.

4. Judgment and Decision: The AO's disallowance was based on various grounds, including the ownership of two residential houses, starting construction before the sale consideration, and not investing the full sale consideration in the property. The ld. CIT(A) upheld the disallowance primarily on the grounds of multiple residential properties owned by the assessee. However, the assessee's additional evidence raised doubts on the ownership status of the flat in question. The Tribunal set aside the matter to the ld. CIT(A) to consider the additional evidence and address all grounds raised by the AO in denying the deduction U/s 54F. The assessee was granted another hearing before a fresh decision.

5. Conclusion: The appeal of the assessee was allowed for statistical purposes, emphasizing the need for a comprehensive review of all grounds and evidence related to the disallowance of the deduction U/s 54F of the Act. The judgment was pronounced on 13/08/2020 by the Appellate Tribunal ITAT Jaipur, with detailed analysis and directions for further consideration.

---