Without establishment sale transaction as LTCG, assessee not entitled for deduction u/s 54F

Without establishment sale transaction as long term capital gain, assessee is not entitled for deduction u/s 54F of the Act – ITAT

In a recent judgment, ITAT Mumbai has held that without establishment the sale transaction as long term capital gain, he is not entitled for deduction u/s 54F of the Act.

ABCAUS Case Law Citation:
4437 (2025) (03) abcaus.in ITAT

In the instant case the appellant assessee had challenged the order passed by the CIT(A) National Faceless Appeal Centre in approving making addition of Short Term Capital Gain thereby disallowing, deduction u/s 54F of the Income Tax Act, 1961 (the Act).

The assessee filed his return showing income from long term capital gain and claimed exemption u/s 54F of the Act. However, the Assessing Officer treated the sale of the property as short term capital gain and accordingly disallowed the claim of deduction u/s 54F of the Act.

On further appeal, despite seven notices, no representation was made before the CIT(A) and therefore, the CIT(A) on the basis of documents dismissed the effective grounds of the assessee.

The CIT(A) observed that on verification of the records, the property sold by the assessee was though allotted to the assessee earlier but it was only transferred to the assessee after more than three years. Further, the appellant failed to explain as to how the property was allotted earlier when no such property was existent on that day. Furthermore, there was no mention regarding the allotment of the property in the registered agreement.

Under the circumstances, the CIT(A) rejected the contention of the appellant that the property was taken over by her on the date of allotment.

The CIT(A) held that mere claim of the appellant cannot be accepted in the absence of any such supporting proof. During the course of appellate proceedings too, no essential supporting documents were furnished which are required to establish genuineness of the claim made.

The Tribunal noted that no evidence in support of the sale of the property by assessee as long term capital gain and for subsequent deduction u/s 54F of the Act had  been filed either before the lower authorities or before the Bench.

The Tribunal held that evidently without supporting the sale transaction as long term capital gain the assessee is not entitled for deduction u/s 54F of the Act.

Accordingly, the Tribunal dismissed the appeal.

Download Full Judgment Click Here >>

• Empanelment of ICAI Exam observer for January 2027 Examinations. Last date: 20.11.2026
• No arrest under GST- Major decision of 57th Meeting of GST Council held on 8th October 2026
• Later SC ruling cannot render an act done in compliance of a court order a statutory default
• Interest payment on mobilisation advance to NHAI not liable to TDS u/s 194A
• Typographical error in turnover accepted during assessment not a mistake apparent from record