On the sale of a vacant land, the Income Tax Act’s Section 54 deduction is not available

Fact and issue of the case

Brief facts of the case are that the assessee is an individual, filed her return of income on 30.07.2013 for the AY 2013-14 admitting total income of Rs.4,88,937/- consisting of income from house property of Rs.1,02,945/-, long term capital gain of Rs.3,60,837/- and income from other sources of Rs.25,155/- and agricultural income of Rs.90,000/-. The AO finalized the assessment proceedings and has calculated the long term capital gains at Rs.63,55,216 by disallowing the claim of the assessee u/s. 54 of the I.T.Act.

None appeared on behalf of the assessee during the course of proceedings despite repeated notices sent to the assessee.

ID.DR had drawn our attention to the finding of the ld.CIT(A), which are to the following effect:-

During the F.Y. 2003-04, the assessee had purchased following two properties.

Name of the seller	Extent and location of land	Document No & Date	Consideration in Rs.
Sri K.V.G.L.V Prasada, Sri K.b.Tilak, Sri K.Vijaya Mohan and Smt. Abbineni Anasuya	300 Sq.Yard in Plot bearing No.232 in Survey No.104/1, Venkateshwara HAL Co- Operative society, Kondapur Village, Serilingampally Mandal	13818/2003 dt. 01.11.2003	150000
Do	300 Sq.Yard in Plot bearing NO.231 in Survey NO.104/1, Venkateshwara HAL co- Operative Society, Kondapur village	12563/2003 dt. 30.09.2003	150000

Observation of the court

We have gone through the order passed by the ld.CIT(A), we do not find any reason to interfere in the order passed by the ld.CIT(A) on merit. In this present case, the assessee has filed the present appeal after a long delay of 2080 days. Before us, no explanation has been given by way of affidavit explaining the reasons of filing the appeal after such a long period. In view of the above when no explanation has been given by the assessee, the appeal is highly time barred and therefore, is required to be dismissed on this ground allowed.

Though, we have mentioned hereinabove, the appeal of the assessee is time barred, however, we have also examined the order passed by the ld.CIT(A). The perusal of the order clearly shows that the assessee had sold and purchased the plots only and has not acquired any residential house within the meaning of law. Further, as mentioned by the ld.CIT(A), the assessee is having more than two houses, therefore, the assessee is not entitled to any claim u/s. 54F of the I.T.Act. In the light of the above, the assessee has no case of merit, which is duly mentioned by the ld.CIT(A) in the order passed by him. Accordingly, this appeal is dismissed.

In the result, the appeal of the assessee is dismissed.

Order pronounced in the Open Court on 24th January, 2023

Read the full order from here

Bollineni-Krishna-Kumari-Vs-ITO-ITAT-Hyderabad