Appellant: Rajeev Jain, Meerut, Uttar Pradesh – PAN No. AAMPJ8115H
Respondent: ACIT, Circle-2, Meerut
For the Assessee: Sh. Shiv Kumar, Adv.
For the Revenue: Sh. Umesh Takyar, Sr. DR
Date of Hearing: December 29, 2021
Date of Pronouncement: December 30, 2021
Rajeev Jain, a salaried employee of PSU Power Corporation Ltd., appealed against the orders of the CIT(A), Meerut, which pertained to deductions claimed under section 54F for the assessment year 2012-13. Jain sold a residential plot in Indirapuram for Rs.90,00,000 and declared a capital gain of Rs.77,57,239, claiming a deduction for investment in a new house property.
The Assessing Officer initially disallowed the deduction under section 54F, not recognizing the total value of the investment made by Jain. This decision was partly overturned by the CIT(A), who allowed most of the deduction but maintained that funds from a specific loan could not be considered for exemption.
The Tribunal found that the CIT(A) had erred in restricting the exemption and confirmed that all capital gains utilized in acquiring the new property qualify for deduction under section 54F, regardless of whether they were directly received from the sale or subsequently gathered through loans. Additionally, the Tribunal ruled in favor of the taxpayer regarding expenses for finishing work on the new flat and registration costs, which were funded from capital gains.
The Tribunal’s decision highlighted the importance of the intent and final use of capital gains in claiming deductions under section 54F, thus allowing Rajeev Jain’s appeal. The case underscores the complexity of tax deductions related to real estate transactions and the careful consideration required to determine eligibility under tax law provisions.
The Tribunal allowed the appeal in ITA No. 282/Del/2016, thereby granting Jain the claimed deductions, and dismissed the appeal in ITA No. 174/Del/2021 as infructuous due to overlap in the issues addressed. The order was pronounced in open court immediately following the hearing, establishing a precedent for similar cases involving capital gains and property investments.
Rajeev Jain vs. ACIT Circle-2, Meerut (2012-13): Capital Gains Exemption Claim on Property Sale
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