{"id":1202,"date":"2025-05-30T19:10:54","date_gmt":"2025-05-30T14:40:54","guid":{"rendered":"https:\/\/caalokkumar.com\/my-writing\/?p=1202"},"modified":"2025-05-30T19:10:57","modified_gmt":"2025-05-30T14:40:57","slug":"oral-gift-to-daughter-on-marriage-valid-for-section-54f-exemption-itat-hyderabad-ruling","status":"publish","type":"post","link":"https:\/\/caalokkumar.com\/my-writing\/oral-gift-to-daughter-on-marriage-valid-for-section-54f-exemption-itat-hyderabad-ruling\/","title":{"rendered":"Oral Gift to Daughter on Marriage Valid for Section 54F Exemption: ITAT Hyderabad Ruling"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">In a noteworthy decision, the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, recently ruled in favor of a taxpayer who had claimed an exemption under\u00a0<strong><a href=\"http:\/\/caalokkumar.com\">Section 54F of the Income Tax Act, 1961<\/a><\/strong>. This section provides tax relief on capital gains if the money is invested in a residential house, provided certain conditions are met. One of the main conditions is that the taxpayer should\u00a0<strong>not own more than one residential house property (excluding the new one purchased)<\/strong>\u00a0at the time of selling the original asset.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s what happened in the case and why this decision is important for taxpayers:<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Case Summary:<\/strong><\/h3>\n\n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Case:<\/strong>\u00a0<em>Income-tax Officer vs. Narasimha Reddy Duthala<\/em> (Income Tax Appellate Tribunal &#8211; Hyderabad)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Income Tax Officer, Ward-2(1), &#8230; vs Narasimha Reddy Duthala, Hyderabad on 9 May, 2025<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The taxpayer sold unlisted shares for a huge amount \u2014 \u20b992.49 crore.<\/li>\n\n\n\n<li>He invested \u20b943.83 crore in a new residential house and \u20b910.67 crore in a Capital Gains Account Scheme.<\/li>\n\n\n\n<li>He claimed exemption under Section 54F on the capital gains.<\/li>\n\n\n\n<li>However, the Assessing Officer (AO) denied the exemption. Why? Because according to the AO, the taxpayer owned\u00a0<strong>more than one house<\/strong>\u00a0on the date of sale \u2014 which is\u00a0<strong>not allowed under Section 54F<\/strong>.<\/li>\n<\/ul>\n<\/blockquote>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Dispute: Was There More Than One House?<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The taxpayer clarified that\u00a0<strong>one of the houses<\/strong>\u00a0the AO counted was\u00a0<strong>gifted to his daughter<\/strong>\u00a0at the time of her marriage in 2015.<\/li>\n\n\n\n<li>But there was a problem: The\u00a0<strong>formal registered gift deed<\/strong>\u00a0for the property was done only in\u00a0<strong>2022<\/strong>, much later than the date of the gift.<\/li>\n\n\n\n<li>The AO argued that a\u00a0<strong>valid gift of immovable property (like a house)<\/strong>\u00a0requires a\u00a0<strong>registered deed<\/strong>, and since there was no such document in 2015, the gift could not be accepted.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What the Taxpayer Showed:<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">To prove that the house was genuinely gifted in 2015, the taxpayer submitted:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>A\u00a0<strong><a href=\"http:\/\/caindwarka.com\" target=\"_blank\" rel=\"noopener\">registered gift deed<\/a><\/strong>\u00a0made in 2022 \u2014 showing his intent to give the property to his daughter.<\/li>\n\n\n\n<li>A\u00a0<strong>Streedhan Agreement<\/strong>\u00a0between his daughter and her husband, confirming the property was received as a gift in 2015.<\/li>\n\n\n\n<li>His daughter\u2019s\u00a0<a href=\"https:\/\/g.co\/kgs\/xY2VKfb\"><strong>Income Tax Return<\/strong>,<\/a> which showed her living at that address \u2014 supporting her possession of the property.<\/li>\n\n\n\n<li>The fact that the gift was made\u00a0<strong>out of love and affection<\/strong>, a common practice in Indian families, especially during marriages.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What the Tribunal (ITAT) Decided:<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Tribunal\u00a0<strong>accepted<\/strong>\u00a0the taxpayer\u2019s claim.<\/li>\n\n\n\n<li>It agreed that while\u00a0<strong>the law (Section 123 of Transfer of Property Act)<\/strong>\u00a0usually requires a registered deed for gifting property, there are exceptions in\u00a0<strong>Indian culture and traditions<\/strong>.<\/li>\n\n\n\n<li>In Indian society, it&#8217;s\u00a0<strong>common for parents to give property to children during marriage<\/strong>\u00a0without formal documentation.<\/li>\n\n\n\n<li>Since the evidence clearly showed the gift happened in 2015, the Tribunal held that\u00a0<strong>the taxpayer did not own more than one house<\/strong>\u00a0on the relevant date.<\/li>\n\n\n\n<li>Therefore, the conditions of\u00a0<strong>Section 54F were fulfilled<\/strong>, and the\u00a0<strong><a href=\"https:\/\/g.co\/kgs\/xY2VKfb\">capital gains exemption <\/a>was allowed<\/strong>.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Why This Decision Matters:<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This judgment is important because:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It\u00a0<strong>recognizes traditional practices<\/strong>\u00a0like oral gifts in Indian families.<\/li>\n\n\n\n<li>It shows that\u00a0<strong>intent, relationship, and supporting evidence<\/strong>\u00a0can sometimes compensate for the lack of formal documentation.<\/li>\n\n\n\n<li>It gives relief to genuine taxpayers who follow customs but may not always complete legal formalities on time.<\/li>\n\n\n\n<li>It shows that the\u00a0<strong>tax authorities and courts can take a practical and culturally sensitive approach<\/strong>\u00a0in interpreting tax laws.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Key Takeaway for Taxpayers:<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you have given a house as a gift \u2014 especially to children at the time of marriage \u2014 and there was no registered deed at that time, you may still be able to&nbsp;<strong>prove the gift through other strong evidence<\/strong>. This could help you claim tax benefits like the&nbsp;<strong>Section 54F exemption<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, it&#8217;s&nbsp;<strong>always safer to register such gifts<\/strong>&nbsp;to avoid disputes. When in doubt, consult a tax professional to make sure your claims are legally valid and well-documented.<\/p>\n\n\n\n<pre id=\"pre_1\" class=\"wp-block-code\"><code><em><strong>IN THE <a href=\"https:\/\/g.co\/kgs\/xY2VKfb\">INCOME TAX APPELLATE TRIBUNAL<\/a>\n         HYDERABAD \"B\" BENCH: HYDERABAD\n\nBEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER\n                     AND\n      SHRI RAVISH SOOD, JUDICIAL MEMBER\n\n                 ITA.No.1113\/Hyd.\/2024\n               Assessment Year 2022-2023\n\nThe Income Tax Officer,       Narasimha Reddy Duthala,\nWard-2(1),      Hyderabad     Hyderabad - 500 032\n                          vs.\nPIN - 500 084.                Telangana.\nTelangana.                    PAN ABPPD8192C\n        (Appellant)                  (Respondent)\n\n               For Revenue : MS. M. Narmada, CIT-DR\n               For Revenue : Shri Mohd. Afzal, Advocate\n\n           Date of Hearing : 13.03.2025\n    Date of Pronouncement : 09.05.2025\n<\/strong><\/em><\/code><\/pre>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/g.co\/kgs\/xY2VKfb\">TAX Consultant in Dwarka Delhi<\/a> <a href=\"https:\/\/g.co\/kgs\/xY2VKfb\">GST Registration In Dwarka Delhi<\/a> <a href=\"https:\/\/g.co\/kgs\/xY2VKfb\">GST Consultant in Dwarka<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In a noteworthy decision, the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, recently ruled in favor of a taxpayer who had claimed an exemption under\u00a0Section 54F of the Income Tax&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1202","post","type-post","status-publish","format-standard","hentry","category-income-tax-act-1961"],"_links":{"self":[{"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/posts\/1202","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/comments?post=1202"}],"version-history":[{"count":1,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/posts\/1202\/revisions"}],"predecessor-version":[{"id":1203,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/posts\/1202\/revisions\/1203"}],"wp:attachment":[{"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/media?parent=1202"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/categories?post=1202"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/caalokkumar.com\/my-writing\/wp-json\/wp\/v2\/tags?post=1202"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}