Tax Benefit Claim Not Affected by Builder’s Mistake: ITAT

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    In a unique case handled by the Income-tax Appellate Tribunal (ITAT) in Mumbai, a taxpayer named Mukesh Harilal Mehta had requested a deduction under section 54 of the Income-tax (I-T) Act for the financial year 2014-15. The tax tribunal decided that Mehta’s claim couldn’t be rejected just because the builder made a mistake in assigning the flat.

    Section 54 of the I-T Act says that if someone sells a house and then buys another one within a certain time, they can avoid paying tax on the profit made from selling the first house.

    Mehta followed all the rules for this deduction. However, the tax officer said no because there wasn’t a proper document showing that Mehta bought the new flat. Also, the details in the letter saying Mehta could have the new flat were different from the one he paid for.

    The ITAT said it wasn’t fair to punish Mehta for the builder’s mistake.

    Also read: Chennai Emerges as Hotspot for Real Estate Investments

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