From Financialexpress · Mithilesh Jha · · 1m 50s
ITAT allows Rs 11.80 crore tax exemption for 17 flats sold
ITAT rules taxpayer can claim full Section 54 relief after selling 17 flats and reinvesting gains in 5 properties.
In brief
ITAT rules taxpayer can claim full Section 54 relief after selling 17 flats and reinvesting gains in 5 properties. Bengaluru ITAT allowed Rs 11.80 crore capital gains tax exemption for taxpayer who sold 17 flats and reinvested gains in five residential properties under Section 54 of Income Tax Act. Originally reported…
ITAT ruling on Section 54
Bengaluru ITAT allowed taxpayer to claim Rs 11.80 crore capital gains tax exemption after selling 17 flats and reinvesting gains in five residential properties.
Section 54 tax exemption rules
Taxpayers can claim tax exemption under Section 54 of Income Tax Act when selling residential property and reinvesting capital gains in another house.
Taxpayer's case details
Pavan Kumar Agarwal sold 17 flats from two projects generating Rs 11.80 crore long-term capital gains in assessment year 2020-21.
Reinvestment amounts
Agarwal reinvested gains in four residential properties and construction, totaling Rs 11,80,61,786.
Tax department's position
Assessing officer restricted exemption to Rs 5.91 crore for one property, adding remaining Rs 5.88 crore to taxable gains.
Taxpayer's argument
Agarwal claimed exemption applies separately to each of 17 flats sold, not restricted to one new property.
Tribunal's interpretation
Bengaluru ITAT ruled Section 54 exemption not limited to one property when gains from multiple sales are reinvested.
Key legal reasoning
Tribunal noted amendment replacing 'a residential house' with 'one residential house' does not restrict reinvestment to single property.
Tribunal's decision
ITAT allowed full Rs 11.80 crore exemption for 17 flats sold and reinvested in five properties.
Tax implications
Taxpayers must examine property sold, reinvestment and applicable law before claiming Section 54 relief.
Expert advice
Tax expert Dinkar Sharma advises taxpayers to check assessment year provisions and seek professional advice for capital gains tax.
What it means
Bengaluru ITAT allowed Rs 11.80 crore capital gains tax exemption for taxpayer who sold 17 flats and reinvested gains in five residential properties under Section 54 of Income Tax Act.
