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2018 (8) TMI 260 - AT - Income TaxDeduction u/s. 54 denied - no residential house in the old property - long term capital gain on transfer of the old property under the JDA - assessee submitted that there is clear evidence to show a building viz., a residential house existed over the old property and therefore the provisions of section 54 of the Act ought to have been applied - Held that:- As far as the question whether section 54 of the Act would apply, it is clear from the Settlement Deed dated 24.07.2002 under which the assessee got the property that there was a residential house in the property which was subject matter of JDA. The CIT(Appeals), however, proceeded on the basis that the JDA does not make any reference to any building. It cannot come to the conclusion that the subject matter of the JDA is only a land, because the reference is to property bearing Bangalore Mahanagara Palike Old No.66 & 67, New No.17 situated at Ittamadu Village, Uttarahalli Hobli, Bangalore South Taluk, Bangalore – 560 085. As far as the deduction u/s. 54F of the Act on the question whether if under a JDA multiple flats are given to the owner whether deduction u/s.54F of the Act can be given, the decision of the Hon’ble High Court of Karnataka and the other decision cited before us supports the plea of the assessee that deduction u/s. 54F of the Act cannot be denied on the ground that multiple flats are obtained by the assessee. See COMMISSIONER OF INCOME-TAX VERSUS SMT. KG. RUKMINIAMMA [2010 (8) TMI 482 - KARNATAKA HIGH COURT] as held it has to be construed as "a residential house" and the assessee is entitled to the benefit accordingly. In that view of the matter, the Court held that the Tribunal as well as the appellate authority were justified in holding that there is no liability to pay Capital Gains tax as the case squarely falls under sec. 54 of the Income Tax Act, 1961. Also the conclusion of CIT(Appeals) that since the assessee did not file return of income making claim for deduction u/s. 54 of 54F of the Act, the same cannot be allowed, we are of the view that the CIT(Appeals) as an appellate authority cannot deny the benefit of deduction which the assessee is entitled to in law. As decided in DR. ASHWIN BALCHAND MEHTA VERSUS JOINT COMMISSIONER OF INCOME TAX, RANGE – 11 (2) , MUMBAI [2015 (11) TMI 1057 - ITAT MUMBAI] even if a claim is not made before the AO, it can be made before the appellate authorities. We are of the view that a lawful claim of deduction cannot be denied by the revenue authorities purely on technicalities. Tax is to be levied and collected in accordance with the law. If the assessee is entitled to deduction while computing the long term capital gain, that cannot be denied on the ground that such a claim was not before the AO - Decided in favour of assessee
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