Claim for deduction under section 54 made for the first time in return of income filed in response to reassessment notice cannot be denied merely on the ground that such a claim was not made in the original return of income

19. ITA No. 7998/Mum. /2025

Mohd. Azam Hasan Sheikh v. ITO

A.Y.: 2017-18 Date of Order: 09.4.2026

Section: 10(10AA)

Claim for deduction under section 54 made for the first time in return of income filed in response to reassessment notice cannot be denied merely on the ground that such a claim was not made in the original return of income

FACTS

The assessee had not filed return of income under section 139 of the Act. The Department, based on the information that during the year under consideration the assessee has purchased an immovable property showing a value of Rs. 45,00,000 issued a notice under section 148 of the Act. The assessee filed a return of income in response to notice issued under section 148 in which he claimed exemption under section 54 of the Act to the tune of Rs.49,00,000 (sic Rs 45,00,000) against capital gains arising on sale of a residential property owned by the assessee jointly with Ms. Binu Azmi on the ground that the entire sale consideration has been invested in acquisition of a new residential property jointly purchased with Ms. Binu Azmi at Thakur Residency, Ulwe, Navi Mumbai for a total considerati