#Long Term Capital Gains

ITAT Bangalore holds that claiming exemption under Section 54F does not require unutilized capital gains to be deposited in the Capital Gains Account Scheme if the new residential house is fully constructed within three years of sale, even if construction costs were incurred after the return filing deadline. This clarifies that actual completion, not mere deposit, is the decisive factor - benefiting taxpayers who reinvest gains in self-built homes with staggered payments.

ITAT Kolkata has ruled that errors in an income tax return - such as incorrect LTCG computation - can be corrected under Section 154 if apparent from the record, regardless of whether the rectification changes the total income. This affirms that the scope of rectification extends to the return itself, not just assessment orders, reinforcing natural justice and the tax officer’s duty to ensure accurate computation under CBDT Circular 14/1955.

Madras High Court rules that admissions made under Section 132(4) of the Income Tax Act during search proceedings cannot independently justify additions to undisclosed income. The court emphasized the need for corroborative evidence, setting aside additions related to deemed dividends and long-term capital gains due to lack of proof, reinforcing safeguards against self-incrimination in tax assessments.

ITAT Delhi rules that RERA-mandated compensation for delayed possession constitutes a transfer of capital asset, not interest income, and must be taxed as long-term capital gains. This precedent clarifies tax treatment for homebuyers receiving compensation under RERA, impacting real estate transactions and tax filings.

ITAT Ahmedabad rules that a mere agreement to purchase a residential property does not satisfy Section 54 exemption requirements; a registered conveyance deed is mandatory to claim capital gains tax relief. The ruling clarifies that taxpayers must ensure legal title transfer to avoid disallowance of exemptions, impacting property sellers relying on unregistered agreements.

ITAT Mumbai rules that share sales on recognized stock exchanges with STT payment, supported by proper documentation, cannot be treated as unexplained income under Section 68 of the IT Act, even if price appreciation or third-party reports raise suspicions. The ruling reinforces the primacy of documented transactions over speculative assessments, protecting taxpayers from arbitrary disallowances.