[ad_1]
on Dec 13, 2023)The Revenue-Tax Appellate Tribunal (ITAT), Delhi bench, has quashed a revisionary order handed by the Principal Commissioner of Revenue-Tax. The tax tribunal held that mere non-deposit of the long-term capital positive factors into the ‘capital positive factors account’ in a chosen financial institution, for the interim interval, can’t be the premise to say no the deduction claimed underneath part 54. This order is prone to help many taxpayers who’re going through an analogous state of affairs.
Underneath part 54 of the Revenue-Tax (I-T) Act, long-term capital positive factors (LTCGs) arising to a person from sale of a residential property are exempt to the extent that such positive factors are invested in direction of buy or building of a brand new residential home, inside the specified timeframe.
The brand new residential home is to be bought both one yr earlier than or two years after the switch of the unique property that was bought. Or it must be constructed inside three years from the date of sale of the unique property. The time restrict that’s obtainable for funding underneath part 54, is longer than the due date of submitting the I-T return.
The taxpayer who’s unable to spend money on a brand new home, earlier than the due date of the tax return for the monetary yr wherein the unique home property was bought, can deposit the LTCGs in a ‘capital positive factors account’ opened by him in a chosen financial institution. This layer is to be utilised for the acquisition/building of a brand new residential home inside the time-frame prescribed underneath part 54.
Within the case, that was heard by the ITAT, through the monetary yr 2011-12, S Gupta, had earned capital positive factors of Rs 14.6 lakh on sale of a residential property that she co-owned. The whole quantity was invested by her in a brand new residential property, inside the given timeframe. Nonetheless, throughout a assessment of her evaluation order, the Principal Commissioner famous that she had not deposited the funds within the capital positive factors account through the interim interval until its utilisation. The Principal Commissioner issued a revisionary order to disallow the deduction claimed underneath part 54. This led to the taxpayer submitting an attraction being filed earlier than the ITAT.
Sankalp Malik, advocate, who represented the taxpayer on this case, advised TOI, “The discovering of the ITAT that when the fundamental circumstances of part 54(1) are glad, the taxpayer stay entitled to assert the deduction, unequivocally exhibits that the courts are inclined to take a helpful view, even when the quantity is just not deposited within the ‘capital positive factors account’ through the interim interval. Nonetheless, it’s important that the funding is made within the new residential home inside the prescribed two-three yr timeframe.”It must be famous that the ITAT bench whereas quashing the revisionary order noticed that the Principal Commissioner had adopted a hyper-technical method.
