2025 (2) TMI 1481

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....ection 54 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] made by the Income Tax Officer, Ward 1, International Taxation, Ahmedabad [hereinafter referred to as "AO] vide his order dated 26-04-2023 passed under section 147 r.w.s.144C(3) of the Act. Facts of the Case: 2. The assessee was a 1/3rd co-owner of an immovable property sold for Rs. 55,00,000 with his share of sale consideration amounting to Rs. 18,33,333. After applying indexation, the Long Term Capital Gain (LTCG) was computed at Rs. 14,62,660, for which the assessee claimed deduction under Section 54 of the Act on the grounds of reinvestment in a new property. The AO disallowed the deduction, noting that the new property was registered solely in the name o....

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....d to do so, leading the CIT(A) to decide the matter based on the available records. The assessee contended that he had invested Rs. 17,68,000 from his bank account in purchasing the new house and that the purchase was made in his mother's name for sentimental reasons. However, the CIT(A) rejected this argument, noting that mere transfer of funds does not establish ownership, and the assessee failed to furnish any documentary evidence proving joint ownership or a legal right over the property. The CIT(A) distinguished the case of Laxmi Narayan v. CIT (2018) 402 ITR 117 (Raj. HC), relied upon by the assessee, stating that it pertained to Section 54B of the Act, which allows exemption when property is purchased in a spouse's name, whereas Sect....

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...., International Taxation, and his residential status is Non-Resident. The CIT(A) had called for a remand report from the AO through the ITBA system, but the AO failed to submit any response. The CIT(A), therefore, proceeded to decide the matter based on the material available on record. Upon review, the CIT(A) upheld the AO's findings and confirmed the disallowance of deduction under Section 54 of the Act, on the grounds that the new property was registered in the name of the assessee's mother, Late Smt. Heenaben Vashi, and not in the assessee's own name. The AO, in his order, specifically mentioned that the assessee invested the amount in the name of his Late mother, raising further concerns about the legal ownership and ultimate successio....