Purchase Of New House Without NOC From AO Within 2 years: ITAT Allows Capital Gain Exemption
The Income Tax Appellate Tribunal (ITAT), Delhi Bench has held that the capital gain exemption is allowable even when the amount invested in a capital gain account is utilised for the purchase of a new house without a NOC from AO within 2 years.The two-member bench of Saktijit Dey (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member) has allowed the expenditure incurred...
The Income Tax Appellate Tribunal (ITAT), Delhi Bench has held that the capital gain exemption is allowable even when the amount invested in a capital gain account is utilised for the purchase of a new house without a NOC from AO within 2 years.
The two-member bench of Saktijit Dey (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member) has allowed the expenditure incurred of Rs. 1,65,000, being the commission incurred for the purchase of a residential house and payment made for the deed writer.
The appellant assessee filed a return of income on August 28, 2015, declaring an income of Rs.63,35,840. The assessee has derived income from house property, capital gains, and income from other sources.
The AO disallowed the deduction under Section 54F of the Income Tax Act. The AO observed that the capital gain account had been closed without the approval of the Assessing Officer. Thus, filed to satisfy the mandatory requirement of closing the account with due approval of the AO. The CIT (A) concurred with the observation of the AO.
The ITAT noted that an amount of Rs.40,00,000 has been invested in the specified bonds, in this case REC Bonds, and has purchased a house for Rs.82,50,000. Hence, the observation of CIT (A) that the assessee is not eligible for a claim of exemption under sections 54 and 54F is against the provisions of the Income Tax Act.
The tribunal allowed the appeal of the assessee.
Case Title: Ramesh Chander Nijhawan Versus ACIT
Citation: ITA No. 8488/Del/2019
Dated: 15.07.2022
Counsel For Appellant: CA Manoj Kumar
Counsel For Respondent: Sr. DR Shankar Gupta