TaxTMI 
TaxTMI 
2026 (7) TMI 1896
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....48 of the Income-tax Act, 1961 dated 31.03.2022, having been issued in violation of the mandatory provisions of section 151A of the Act, is without jurisdiction and bad in law. Consequently, the reassessment proceedings initiated pursuant thereto and the assessment order dated 24.03.2023 are void ab initio and unsustainable in law. Hence, the notice issued under section 148 and the consequent assessment order deserve to be quashed as being illegal and without authority of law. Grounds on Merits 3. The Learned National Faceless Appeal Centre (NFAC) erred in law and on facts in confirming the action of the AO by assessing the total income at Rs.1,04,93,000/- as against the total income of Rs.1,73,000/-. The disallowance made under section 54F is not all justified and the same may be deleted. 4. The learned NFAC has erred in law and on facts in confirming the addition of Rs.1,03,20,000/- by disallowing the exemption claimed under section 54F of the Income-tax Act, 1961, on the alleged ground that the appellant had not purchased a new residential house property within the time period prescribed under section 54F. The appellant submits that the finding of the ....
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....in it was submitted that the assessee was merely a confirming party to the agreement for sale of an immovable property dated 17/06/2017, for a total sale consideration of Rs. 5,35,00,000/-. It was contended that out of the total consideration, the assessee received Rs. 1,10,00,000/- as his share. It was further submitted that the said amount was invested in accordance with the provisions of section 54F of the Act and, was claimed as exempt. 2.1.1. However, the Ld.AO, while passing the order under section 148A(d) of the Act on 31/03/2022, observed that the assessee had failed to satisfactorily explain and substantiate the claim of deduction u/s 54F of the Act by furnishing cogent documentary evidence. Accordingly, the Ld.AO held that, income chargeable to tax escaped assessment and proceeded on the premise that the sale consideration of Rs. 5,35,00,000/- was liable to be assessed in the hands of the assessee. 2.2. Pursuant to the order passed under section 148A(d) of the Act, notice u/s 148 dated 31/03/2022 was issued. In response thereto, the assessee filed its return of income declaring total income of Rs. 1,73,000/-. Subsequently, statutory notices u/s 143(2) and 142(1) wer....
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.... the Ld.AO denied the exemption claimed by the assessee under section 54F of the Act and completed the assessment accordingly. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). 2.5. The Ld.CIT(A), after considering the submissions of the assessee and examining the material available on record, observed and held as under:- "6.6 The appellant pointed out that he became entitled for Rs. 1,10,00,000/- on extinguishment of his right in land admeasuring 46.4515 sq. meters due the transfer of the land under reference to M/s. Prime Group LLP. M/s S.R. Developers, is a sister concern of M/s. Prime Group LLP and was developing a slum redevelopment project at village Dahisar, Taluka Borivali, Dist. Mumbai. The appellant in lieu of the sum of Rs. 1,10,00,000/- due to him from M/s. Prime Group LLP was offered a residential flat in the slum redevelopment project under of the sister concern M/s S.R. Developers.The appellant accepted the said offer and M/s S.R. Developers allotted to the appellant under letter of allotment dt. 10.06.2017, a residential flat admeasuring 1268.85 sq ft., being flat no. 402, building no. 2, Grandeur at Dahisar (E....
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....ce of claim of deduction u/s 54F of Rs. 1,03,20,000/- only. Hence, the action of the AO is confirmed." Aggrieved by the order of Ld.CIT(A), assessee is in appeal before us. 3. Before this Tribunal, the Ld.AR submitted that Ground Nos. 1 & 2 raised by assessee is challenging the validity of re-assessment proceedings. However, the Ld.AR chose to argue on merits of the case. The Ld.AR submitted that there is an application for an additional ground raised by assessee dated 23/06/2026 wherein a specific claim of deduction u/s 54F of the Act was raised. The Ld.AR submitted that assessee wrongly offered the capital gains that arose out of the agreement dated 31/03/2017 in the year under consideration instead of A.Y. 2017-18 based on the date of agreement. He submitted that no new evidence needs to be looked into to adjudicate this additional ground raised. He thus submitted that, application for admission of additional ground may be admitted. 3.1. We have considered the submissions advanced. We find that the additional ground raised by the assessee pertains to the claim of deduction u/s 54F of the Act and arises from the facts already borne out from the record. No fresh evidence ....
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....sessee on 29/12/2012 pursuant to a letter issued by M/s Hare Krishna Developers, Pune. 4.2. The Ld. AR further submitted that the assessee, under the Deed of Conveyance dated 31/03/2017, surrendered the aforesaid rights in favour of M/s Prime Group LLP, which had purchased the entire land from M/s Hare Krishna Developers. In consideration of such surrender of rights, the assessee received a sum of Rs. 1,10,00,000/-. 4.2.1. It was contended that the Deed of Conveyance dated 31/03/2017 was registered before the Sub-Registrar on 07/06/2017. Accordingly, the Ld. AR submitted that the capital gains arising from the transfer of the aforesaid rights were liable to be assessed in A.Y. 2017-18 and not in the year under consideration. It was, therefore, argued that the Ld. AO had erred in bringing the said amount to tax in the impugned assessment year. 4.3. Without prejudice to the above contention, the Ld. AR submitted that, pursuant to the redevelopment undertaken by M/s Prime Group LLP, the assessee was allotted a residential flat against the consideration of Rs. 1,10,00,000/- received by him. In this regard, reliance was placed on the Letter of Allotment dated 10/06/2017, whereb....
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....passed by authorities below. We have considered the submissions advanced by both sides in the light of the records placed before us. 5. The only issue requiring adjudication is whether the assessee is entitled to exemption u/s 54F of the Act. It is observed that there is no dispute by the authorities below regarding the Letter of Allotment dated 10/06/2017, which specifically records that the consideration of Rs. 1,10,00,000/- received by the assessee stood adjusted towards the purchase consideration of the new residential house. The exemption claimed by the assessee has been denied by the Ld. AO only on the ground that the assessee had not furnished documents evidencing the purchase of the new residential property. It is also not the case of the Revenue that there has been any violation of the conditions prescribed u/s 54F of the Act. 5.1. We find merit in the reliance placed by the assessee on CBDT Circular No. 471 dated 15/10/1986, which clarifies that where an allotment letter is issued in respect of a flat under a construction scheme, the date of allotment is to be considered as the relevant date for determining the acquisition of the property for the purposes of the ....