Income Tax Appeal No. 449 of 2009. Case: M.B. Ramesh S/o Sri C. Basavaraj URS Vs The Income Tax Officer. High Court of Karnataka (India)

Case NumberIncome Tax Appeal No. 449 of 2009
CounselFor the Appellant: S. Parthasarathi, Adv.
JudgesD.V. Shylendra Kumar and N. Ananda, JJ.
IssueIncome Tax Act, 1961 - Section 54 and 260A
Citation[2010] 320 ITR 451 (KAR), [2010] 320 ITR 451 (Karn)
Judgement DateJanuary 04, 2010
CourtHigh Court of Karnataka (India)

Judgment:

D.V. Shylendra Kumar, J., (At )

  1. The appellant is an individual assessee and in respect of return of income for the assessment year 1997-98 had claimed certain exemptions under Section 54 of the Income Tax Act, 1961 [for short 'the Act'] on the premise that the profits earned out of sale of the residential property has been reinvested in a like property and therefore sought to reduce the taxable income to the extent of exemption permitted in terms of Section 54 of the Act.

  2. While the assessing authority refused exemption under Section 54 of the Act on a factual verification of the place where the assessee claimed to have had the residential property as the assessing authority found only a mud structure not worthy of caption 'residential house', the aggrieved assessee appealed to the first appellate authority.

  3. The first appellate authority took the view that the property in question had already been demolished and accepted the claim of the assessee that the assessee had in turn sold the property in which the gains had been reinvested by some other person and that person had reinvested for profits etc., and therefore there is no question of denial of benefit under Section 54 of the Act under the head 'capital gains'.

  4. The revenue went in further appeal to the tribunal who found that as a matter of fact there was never any structure fitting into the description of 'habitable residential house' on the property which had been initially sold by the assessee and therefore allowed the appeal of the revenue, reversed the finding of the first appellate authority and affirmed the order of the assessing authority.

  5. For such verification, the tribunal relied upon the Panchayat records which on verification, the Tribunal found that it did not indicate the structure being in place in respect of the property held and sold by the assessee.

  6. Sri Parthasarathi...

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