S. 54F : Capital gains- Investment in a residential house–Advance received cannot be assessed as capital gains–The AO was directed to recompute the capital gains on actual consideration and also directed to allow the exemption under section 54F. [S. 45]
The assessee, an individual, sold 30.35 cents of land out of 121 cents situated at Siruseri Village for ₹1,00,44,000/-. The AO, however, treated the entire sum of ₹2.50 crore (including advances for balance land) as consideration and computed LTCG, further denying exemption u/s 54F for want of proper documents. The CIT(A) upheld the addition. On appeal, the Tribunal held that only ₹1,00,44,000/- received for the land actually transferred could be considered as sale consideration, the balance being advance for unsold portion. As regards exemption u/s 54F, the ITAT admitted fresh details such as bank statements and found sufficient evidence of reinvestment of ₹82,15,610/- in construction of a residential house. It directed the AO to recompute LTCG by taking sale consideration at ₹1,00,44,000/- and granting deduction u/s 54F for ₹82,15,610/-. Appeal partly allowed. (AY 2014-15) (ITA No. 2873/Chny/2024, dt. 01/09/2025)
Natesan Ekambaram v. DCIT (Chennai) ( Trib) www.itatonline .org
[Coram : Hon’ble Shri SS Viswanethra Ravi, JM and Hon’ble Shri S.R. Raghunatha, AM]