2026 (5) TMI 742

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....tricting the deduction claimed by the assessee u/s 54F of the Act. 2. Briefly stated, the facts of the case are that the assessee is an individual who filed return of income declaring total income at Rs.20,75,450/-. The case was selected for limited scrutiny under CASS to examine the deduction claimed u/s 54F of the Act. During the year under consideration, the assessee sold an immovable property for a consideration of Rs.1,20,96,000/- and earned long term capital gain amounting to Rs.1,10,01,913/-. Against the said capital gain, the assessee claimed deduction u/s 54F of the Act amounting to Rs.1,00,87,016/- on account of investment made in a residential house property. 3. During the course of assessment proceedings, the Assessing Off....

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....ing Officer. 5. Aggrieved against the assessment order, the assessee carried the matter in appeal before the Ld. CIT(A). The Ld. CIT(A), however, confirmed the action of the Assessing Officer primarily on the ground that the assessee had failed to deposit the unutilized capital gain amount in the Capital Gain Account Scheme before the due date prescribed u/s 139(1) of the Act and therefore the assessee was not entitled to deduction u/s 54F in respect of the amount invested subsequently. 6. Before us, the Ld. Counsel for the assessee submitted that the entire amount of capital gain stood invested in acquisition/construction of the residential house property within the overall statutory period prescribed under section 54F of the Act and....

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....ised by the Assessing Officer with regard to discrepancy in the flat number stands adequately explained and does not survive any longer. 9. Be that as it may, we further note that the principal basis adopted by the Ld. CIT(A) for sustaining the disallowance was not founded upon the aforesaid discrepancies noted by the Assessing Officer. The disallowance has essentially been confirmed on the technical objection that since the assessee had not deposited the unutilized capital gain amount in the Capital Gain Account Scheme before the due date prescribed u/s 139(1) of the Act, the assessee was disentitled from claiming deduction u/s 54F of the Act. 10. In our considered opinion, such an approach adopted by the Ld. CIT(A) is highly pedanti....