TaxTMI 
TaxTMI 
2019 (3) TMI 466
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....claim deduction under section 54 of the Income Tax Act, 1961 (for short "the Act")? 3. Brief facts are, the assessee is a Hindu Undivided Family (HUF). For the assessment year under dispute, the assessee filed its return of income on 31st July 2013, declaring total income of Rs. 1,11,96,530. In the course of assessment proceedings, the Assessing Officer while examining the computation of total income filed by the assessee along with the return of income, noticed that in the relevant previous year, the assessee has sold various residential as well as commercial properties and derived capital gain. From the computation of capital gain by the assessee, he found that as against the long term capital gain on sale of a residential house at Mal....
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....ultimately rejected assessee's claim deduction both under section 54 as well as section 54F of the Act. Being aggrieved, the assessee preferred appeal before the first appellate authority. 4. Before the learned Commissioner (Appeals), the assessee reiterated its claim of deduction under section 54 of the Act in respect of capital gain arising from transfer of Dhruv Malad Building. It was submitted by the assessee, since the asset transferred was a residential house and the capital gain derived from transfer of such asset is invested in purchase of another residential house, it is eligible to claim deduction under section 54 of the Act. Further, it was submitted by the assessee, though, before the Assessing Officer assessee has revised it....
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.... of the Act and flats have been allotted in his name. Accordingly, he allowed assessee's claim under section 54 of the Act. 5. The learned Departmental Representative relying upon the observations of the Assessing Officer submitted, revised claim of deduction under section 54 of the Act by the assessee is not bonafide. He submitted, since in the return of income the assessee has claimed deduction under section 54F of the Act and revised claim of deduction under section 54 of the Act was not made through a revised return of income, assessee's claim cannot be accepted. 6. The learned Authorised Representative submitted, since there is no dispute that the Dhruv Malad Building sold by the assessee is a residential house, the appropriate p....
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....sed two flats under two separate agreements, however, the flats are not only adjoining but are in all respect a single flat having common entrance, common kitchen, etc. Thus, he submitted, assessee's claim of deduction under section 54 of the Act was rightly allowed by the learned Commissioner (Appeals). 7. We have considered rival submissions and perused material on record. Undoubtedly, the issue in dispute hinges on assessee's claim of deduction under section 54 of the Act. Insofar as the factual aspect relating to the aforesaid issue is concerned, undisputedly, the deduction claimed under section 54 of the Act is against the net long term capital gain arising out of sale of a residential property viz. Dhruv Malad Building. It is also ....
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....n arising from sale of assets other than residential house. In the facts of the present case, there is no dispute that capital gain arises from transfer of a residential house. That being the case, if the assessee invests the capital gain in purchase/construction of a new residential house, it is eligible to claim deduction under section 54 of the Act. Merely because the assessee, by ignorance of law or mistake, has claimed deduction under section 54F instead of section 54 of the Act, such ignorance of law/mistake on the part of the assessee cannot be utilized to its disadvantage by the Assessing Officer. The duty of the Assessing Officer is to correctly compute the real income of the assessee in accordance with the statutory provisions. Wh....