Capital Gain Exemption u/s 54 Cannot be Denied Based on Inadvertent and Bonafide Typographical Error: ITAT

The Lucknow Bench of Income Tax Appellate Tribunal (ITAT) has held that the capital gain exemption under Section 54 of the Income Tax could not be denied on inadvertent and bonafide typographical error.An assessment order was passed by AO whereby an addition was made by rejecting the assessee’s claim under Section 54/54F of Income Tax Act. Perusal of record  had shown that the assessee,M M Pandit HUF filed the copy of sale deed & purchase deed in support of the claim. Thus the assessee sold a residential house and invested the amount in purchase of residential flat. In respect of the aforesaid transactions, the assessee claimed benefit under Section 54F of the Income Tax Act in the return of income. The Assessing Officer took adverse view of the fact that the assessee had claimed benefit erroneously under Section 54F of the Income Tax Act instead of claiming the benefit under Section 54 which was the correct section under which the assessee was eligible for benefit, and made addition.Vijay Prakash Agrawal on behalf of the assessee submitted that the assessee was eligible for the benefit under Section 54 of the Income Tax Act but due to a bonafide and inadvertent typographical mistake, the claim was made erroneously which is the correct section under which the assessee is eligible for benefitHarish Gidwani, appeared on behalf of the revenue.The two-member Bench of Sudhanshu Srivasatava (Judicial Member) and Anadee Nath Missra (Accountant Member) observed that,  Neither assessment order nor the Commissioner of Income tax (CIT(A)), in their respective orders, had  taken the view that on merits the assessee was not eligible for benefit under Section  54 of the Income Tax Act, the bench observed.The Tribunal Bench allowed the appeal holding that  the assessee had already made this claim in the return of income, although, in an inadvertent and bonafide typographical mistake, the section under which the benefit was claimed, was erroneously mentioned as Section 54F instead of Section 54 of the Income Tax Act which was the correct section.

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M M Pandit HUF vs A.C.I.TCITATION:   2023 TAXSCAN (ITAT) 1085Counsel for Appellant:   Shri Vijay Prakash AgrawalCounsel for Respondent:   Shri Harish Gidwani

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