2023 (4) TMI 1097 - AT - Income Tax

Tribunal remands case for re-examination of evidence and compliance with tax deduction rules

The Dy. Commissioner of Income Tax – 1, (International Taxation), Hyderabad. Versus Smt. Syama Reddy Malireddy, Hyderabad.

The Dy. Commissioner of Income Tax – 1, (International Taxation), Hyderabad. Versus Smt. Syama Reddy Malireddy, Hyderabad. - TMI Issues Involved:1. Admission of additional evidence without allowing the Assessing Officer to examine/rebut it.2. Allowing deduction under section 54F despite non-compliance with the stipulated time frame.3. Classification of properties as commercial units without supporting evidence.Summary:1. Admission of Additional Evidence:The Revenue challenged the CIT(A)'s decision to admit additional evidence, specifically the Certificate of SRO, without providing the Assessing Officer an opportunity to examine or rebut it under Rule 46A of the Income Tax Rules, 1962. The Tribunal noted that the CIT(A) admitted public documents like the SRO certificate, municipal taxes, and GST receipts, which could have been obtained by the Assessing Officer. The Tribunal remanded the case back to the Assessing Officer to re-examine these documents and provide a categorical finding on their nature and purpose.2. Deduction under Section 54F:The Revenue contended that the assessee did not purchase the residential property within the two-year period required under section 54F. The Tribunal observed that the assessee had paid a substantial amount to the builder but had not received possession or registered the property within the stipulated time. The Tribunal emphasized the need for strict compliance with section 54F and remanded the case to the Assessing Officer to re-examine whether the assessee fulfilled the conditions for claiming the deduction, especially in light of the new fact of the sale deed dated 01.12.2021.3. Classification of Properties:The Revenue argued that the CIT(A) wrongly categorized nine independent properties as commercial units without sufficient evidence. The Tribunal noted that the CIT(A) relied on documents like SRO certificates and municipal tax receipts to classify the properties. The Tribunal directed the Assessing Officer to re-examine these documents and determine whether the properties were indeed commercial or residential.Conclusion:The Tribunal remanded the case back to the Assessing Officer to re-examine the additional evidence, compliance with section 54F, and the classification of properties, ensuring adherence to legal procedures and providing the assessee an opportunity to present further evidence. The appeal of the Revenue was allowed for statistical purposes.