INCOME TAX ACT, 1961

Section 54F

Capital gains - Exemption under section 54F - Additional claim made during appeal proceedings - Denial of exemption on the ground that claim was not made originally

The assessee during the course of appellate proceedings has submitted that he is entitled to deduction under section 54 in respect of Long Term Capital Gain. The assessee did not file return at any point of time i.e. neither before due date in regular course not in pursuance of notice under section 148. Hence, such claim under section 54 was not made in return. Further, the deduction was not claimed at any time of point during the scrutiny proceedings. Therefore, the same was never examined by the assessing officer. During the appellate proceedings, agreement for purchase of new flat was filed an claim under section 54 was made on that basis. CIT(A) held that such claim cannot be entertained merely on basis of investment in the new flat. In other words, complete details were not submitted to prove that all the conditions of deduction under section 54 have been fulfilled by the assessee. In view of above, claim of assessee for deduction under section 54 was not entertained. Held: Assessee's, claim of deduction under section 54F was rejected without due examination. It is settled law that no tax can be collected or imposed except under the mandate of law. Accordingly, the rejection of claim without examination was not permissible in law. Supreme Court in case of Goetze (India) Limited v. CIT 2006 TaxPub(DT) 1528 (SC) had reiterated the power of ITAT to consider a claim which was made otherwise than by revised return. Hence, in the interest of justice, matter was remanded back to AO.

Applied :Goetze (India) Limited v. CIT 2006 TaxPub(DT) 1528 (SC).

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2010-11

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